Considering Income Statements for Three Companies
Not what you're looking for?
See the attached file for clarity.
Income statements for three companies are provided below:
Company A
Company B
Company C
Sales (10 units)
$600 (A)
$600 (B)
$600 (C)
Less variable costs
400 (A)
250 (B)
0 (C)
Less fixed costs
100 (A)
250 (B)
500 (C)
Net income
$100 (A)
$100 (B)
$100 (C)
Task:
a) Prepare new income statements for the firms assuming each sells one unit less (i.e. each firm sells 9 units)
b) Briefly describe the effect of cost structure on profitability, including recommendations for each company given the current economic environment, as you understand it.
Purchase this Solution
Solution Summary
This solution is comprised of a detailed response which considers the cost structure of three different companies and constructs an accompanying income statement. The income statement is provided in an attached Word document.
Solution Preview
Please see attached file for answers.
The cost structure of an organization significantly affects its profitability. For example, the proportion of its costs into variable and fixed affects its profitability specifically when sales are down. Look at ...
Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Lean your Process
This quiz will help you understand the basic concepts of Lean.