# Income statements for three companies are provided below: Company A Company B Company CSales (10 units) \$600 \$600 \$600Less variable costs 400 250 0Less fixed costs 100 250 500Net income \$100 \$100 \$100a) Prepare new income statements for the firms assumi

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

\$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.
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