Which would you rather have? • An increase in Sales of $1.00 with the same %-Sales...

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Which would you rather have? • An increase in Sales of $1.00 with the same %-Sales...

Which would you rather have?

• An increase in Sales of $1.00 with the same %-Sales cost structure

• Same Sales level but decrease expenses by $1.00.

Use a simple income statement to support your choice.

business finance

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Answer 1

Answer #1

We would calculate net income under both the alternatives Assuming sales is $10 and cost is $5 which mean cost is 50% of sale Under alternative 1, the increase in sales would also increase the cost of business and thus net income would be lower

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Answer 2

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