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 ler Company eaver Company What happens to each company's net income if sales decrease by 10% ? (Round your answers to nearest whole percent.) Net Income $1,000,000 800,000 200,000 60,000 $ 140,000 Decreases by Decreases by $ 1,000,000 600,000 400,000 260,000 $ 140,000 14% %

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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[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
4. What happens to each company's net income if sales decrease by 10%? (Round your answers to nearest whole percent.)
Net Income
$1,000,000
800,000
200,000
60,000
$ 140,000
Decreases by
Decreases by
$ 1,000,000
600,000
400,000
260,000
$ 140,000
14%
%
4
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 4. What happens to each company's net income if sales decrease by 10%? (Round your answers to nearest whole percent.) Net Income $1,000,000 800,000 200,000 60,000 $ 140,000 Decreases by Decreases by $ 1,000,000 600,000 400,000 260,000 $ 140,000 14% % 4
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