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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