(80%) erest (fixed) er Company 1,080,00 270,00 64,00 $ 206,00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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![Required information
[The following information applies to the questions displayed below.]
Shown here are condensed income statements for two different companies (assume no income taxes).
Miller Company
Sales
Variable expenses (80%)
Income before interest
Interest expense (fixed)
Net income
Weaver Company
Sales
Variable expenses (60%)
Income before interest
Interest expense (fixed)
Net income
Company
Miller Company
Weaver Company
$1,350,000
1,080,000
Net income
270,000
64,000
$206,000
2. What happens to each company's net income if sales increase by 40 % ? (Round your answers to nearest whole percent.)
$1,350,000
810,000
540,000
334,000
$ 206,000
%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52615ebc-3deb-446b-94e8-8fddbf33eb42%2Fe1c5d2f2-54bd-4e14-b57f-3bf418edbd46%2Fx0a9ohj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Shown here are condensed income statements for two different companies (assume no income taxes).
Miller Company
Sales
Variable expenses (80%)
Income before interest
Interest expense (fixed)
Net income
Weaver Company
Sales
Variable expenses (60%)
Income before interest
Interest expense (fixed)
Net income
Company
Miller Company
Weaver Company
$1,350,000
1,080,000
Net income
270,000
64,000
$206,000
2. What happens to each company's net income if sales increase by 40 % ? (Round your answers to nearest whole percent.)
$1,350,000
810,000
540,000
334,000
$ 206,000
%
%
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