On Company and Off Company report the following results: On Off Sales $3,000,000

Question

On Company and Off Company report the following results: On Off Sales $3,000,000 $3,000,000 Variable costs 1,200,000 1,800,000 Fixed costs 1,000,000 400,000
Both companies increase sales next year by $500,000. Which company will have the higher profit next year? Answer
Neither; both companies will have the same profit.
On will have higher profit ($100,000 greater than Off).
Off will have higher profit ($100,000 greater than On).
Off will have higher profit ($200,000 greater than On). On Company and Off Company report the following results: On Off Sales $3,000,000 $3,000,000 Variable costs 1,200,000 1,800,000 Fixed costs 1,000,000 400,000
Both companies increase sales next year by $500,000. Which company will have the higher profit next year? Neither; both companies will have the same profit. On will have higher profit ($100,000 greater than Off). Off will have higher profit ($100,000 greater than On). Off will have higher profit ($200,000 greater than On). On Off

Explanation / Answer

neither,both will have same profits

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