Question - To complete this assignment, write your answer in a Microsoft Word document, being sure to include your name. Your answer must include your complete calculations and an explanation that is concise and professional.
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Company A
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Company B
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Company C
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Sales (10 units)
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$600
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$600
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$600
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Less variable costs
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400
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250
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0
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Less fixed costs
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100
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250
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500
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Net income
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$100
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$100
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$100
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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.