Exercise 2-12A (Algo) Using fixed cost as a competitive business strategy LO 2-1,2-2 The...
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Accounting
Exercise A Algo Using fixed cost as a competitive business strategy LO
The following income statements illustrate different cost structures for two competing companies:
Income Statements
Company Name
Baird Adams
Number of customers a
Sales revenue a times $ $ $
Variable cost a times $ NA
Contribution margin
Fixed cost
Net income $ $
Required
Reconstruct Bairds income statement, assuming that it serves customers when it lures customers away from Adams by lowering the sales price to $ per customer.
Reconstruct Adamss income statement, assuming that it serves customers when it lures customers away from Baird by lowering the sales price to $ per customer.
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