es The following income statements illustrate different cost structures for two competing companies: Number of customers (a) Sales revenue (a x $230) Variable cost (a x $185) Contribution margin Fixed cost Net income Income Statements FRANKLIN COMPANY Income Statement Sales revenue Variable cost Contribution margin Fixed cost Net income (loss) Required a. Reconstruct Gibson's income statement, assuming that it serves 178 customers when it lures 89 customers away from Franklin by lowering the sales price to $130 per customer. b. Reconstruct Franklin's income statement, assuming that it serves 178 customers when it lures 89 customers away from Gibson by lowering the sales price to $130 per customer. Complete this question by entering your answers in the tabs below. $ Company Name Franklin 89 $20,470 N/A 20,470 (16,465) $4,005 Required A Required B Reconstruct Franklin's income statement, assuming that it serves 178 customers when it lures 89 customers away from Gibson by lowering the sales price to $130 per customer. $ Gibson 89 0 $20,470 (16,465) 4,005 0 $4,005 0
es The following income statements illustrate different cost structures for two competing companies: Number of customers (a) Sales revenue (a x $230) Variable cost (a x $185) Contribution margin Fixed cost Net income Income Statements FRANKLIN COMPANY Income Statement Sales revenue Variable cost Contribution margin Fixed cost Net income (loss) Required a. Reconstruct Gibson's income statement, assuming that it serves 178 customers when it lures 89 customers away from Franklin by lowering the sales price to $130 per customer. b. Reconstruct Franklin's income statement, assuming that it serves 178 customers when it lures 89 customers away from Gibson by lowering the sales price to $130 per customer. Complete this question by entering your answers in the tabs below. $ Company Name Franklin 89 $20,470 N/A 20,470 (16,465) $4,005 Required A Required B Reconstruct Franklin's income statement, assuming that it serves 178 customers when it lures 89 customers away from Gibson by lowering the sales price to $130 per customer. $ Gibson 89 0 $20,470 (16,465) 4,005 0 $4,005 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Transcribed Image Text:es
The following income statements illustrate different cost structures for two competing companies:
Number of customers (a)
Sales revenue (a x $230)
Variable cost (a x $185)
Contribution margin
Fixed cost
Net income
Income Statements
Required
a. Reconstruct Gibson's income statement, assuming that it serves 178 customers when it lures 89 customers away from Franklin by
lowering the sales price to $130 per customer.
Required A Required B
b. Reconstruct Franklin's income statement, assuming that it serves 178 customers when it lures 89 customers away from Gibson by
lowering the sales price to $130 per customer.
Complete this question by entering your answers in the tabs below.
FRANKLIN COMPANY
Income Statement
Sales revenue
Variable cost
Contribution margin
Fixed cost
Net income (loss)
Gibson
89
$20,470
N/A
20,470
(16,465)
$4,005
Reconstruct Franklin's income statement, assuming that it serves 178 customers when it lures 89 customers away from
Gibson by lowering the sales price to $130 per customer.
Company Name
Franklin
89
$
$
$20,470
(16,465)
4,005
0
$4,005
0
0
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