Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. exercise 2-12a (algo) using fixed cost as a compet

Exercise 2-12A (Algo) Using fixed cost as a competitive business strategy LO 2-1,2-2 The...

60.1K

Verified Solution

Question

Accounting

Exercise 2-12A (Algo) Using fixed cost as a competitive business strategy LO 2-1,2-2
The following income statements illustrate different cost structures for two competing companies:
Income Statements
Company Name
Baird Adams
Number of customers (a)8686
Sales revenue (a \times $240) $20,640 $20,640
Variable cost (a \times $175) N/A (15,050)
Contribution margin 20,6405,590
Fixed cost (15,050)0
Net income $5,590 $5,590
Required
Reconstruct Bairds income statement, assuming that it serves 172 customers when it lures 86 customers away from Adams by lowering the sales price to $140 per customer.
Reconstruct Adamss income statement, assuming that it serves 172 customers when it lures 86 customers away from Baird by lowering the sales price to $140 per customer.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Advance Math
1.2K views

  Solving Differential Equations using Laplace Transform a) y\" - y' -2y = 0 y(0) = 1, y'(0)...

Medical Sciences
1.2K views

What are the types of synapses that occur within the autonomic division? What is the name...

General Management
1.2K views

Agree or Disagree and Why? To assess whether or not a decision maker is a risk...

Physics
1.2K views

Part A Determine the energy in eV of a photon with a 650 nm wavelength...

Calculus
1.2K views

A world famous prix fixe menu includes the following choices Beverage choose one wine soft...

Algebra
1.2K views

Consider the linear transformation T M22 P2 given by T a b a b c...

Accounting
1.2K views

Mead Inc. comenz a operar en el ao 1, a continuacin hay una serie de...

Accounting
1.2K views

if ended inventory for the year is overstated, stockholder's equity reported on the balance sheet...

Accounting
1.2K views

Wellsburgh Co. Purchased a stone quarry on Credit which contains 2,400,000 square feet of slate...

Finance
1.2K views

The bonds of Frank's Welding, Inc pay an 8% coupon, have a 7.98% yield to...

Finance
1.2K views

Consider a 10-year, monthly coupon bond, with a coupon rate of 8.4%, and a face...

Accounting
1.2K views

Brief Exercise 12-4 Gershwin Corporation obtained a franchise from Sonic Hedgehog Inc. for a cash...