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Aerobic Town and Total Fitness reported the following results for 2019: Aerobic...

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Accounting

Aerobic Town and Total Fitness reported the following results for 2019:

Aerobic Town Total Fitness

Sales $120,000 $300,000

Variable costs 60,000 120,000

Fixed costs 20,000 80,000

Due to an economic downturn, it is estimated that sales for both companies will decrease next year by $60,000. Which company will have the larger percentage decrease in profit next year?

Neither, both companies will have the same percentage decrease in profit.

Total Fitness will have a higher percentage decrease in profit

Aerobic Town will have a higher percentage decrease in profit.

Percentage change in profit will increase for both Aerobic Town and Total Fitness

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