Determine the effect on each company's net income if sales decrease by 15% and if sales increase by 10%. Assume that salesfluctuations are attributable to changes in units sold. Do not prepare income statements. (Round answers to 2 decimal places, e.g.10.52. If % change is negative, enter amount with either a negative sign or parenthesis, e.g. -10.52 or (10.52).)Sales decrease by 15%Sheridan YamsSunland YamsSales increase by 10%Sheridan YamsSunland Yams% Change in Net Income%% An investment banker is analyzing two companies that specialize in the production and sale of candied yams. Sheridan Yams uses alabor-intensive approach, and Sunland Yams uses a mechanized system. CVP income statements for the two companies are shownbelow.SalesVariable costsContribution marginFixed costsNet incomeSheridanYams$394,000310,00084,00034,000$50,000Sunland Yams$394,000156,000238,000188,000$50,000The investment banker is interested in acquiring one of these companies. However, she is concerned about the impact that eachcompany's cost structure might have on its profitability.

Determine the effect on each company's net income if sales decrease by 15% and if sales increase by 10%. Assume that sales fluctuations are attributable to changes in units sold. Do not prepare income statements. (Round answers to 2 decimal places, e.g. 10.52. If % change is negative, enter amount with either a negative sign or parenthesis, e.g.-10.52 or (10.52).) Sales decrease by 15% Sheridan Yams Sunland Yams Sales increase by 10% Sheridan Yams Sunland Yams % Change in Net Income %

Determine the effect on each company's net income if sales decrease by 15% and if sales increase by 10%. Assume that sales fluctuations are attributable to changes in units sold. Do not prepare income statements. (Round answers to 2 decimal places, e.g. 10.52. If % change is negative, enter amount with either a negative sign or parenthesis, e.g.-10.52 or (10.52).) Sales decrease by 15% Sheridan Yams Sunland Yams Sales increase by 10% Sheridan Yams Sunland Yams % Change in Net Income %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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I followed the formulas per my textbook and cannot figure these practice questions out. Can you help me figure out what I am doing wrong?
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