Problem - Income statements for three companies are provided below:
Company A Company B Company C
Sales (10 units) $600 $600 $600
Less variable costs $400 $250 $0
Less fixed costs $100 $250 $500
Net income &n bsp; 100 $100 $100
a) Prepare new income statements for the firms assuming each sells one unit less (i.e. each firm sells 9 units)
b) Briefly - in 150 words or less - describe the effect of cost structure on profitability, including recommendations for each company given the current economic environment, as you understand it.