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Answer #1

Sales = $1,350,000 - ($1,350,000*10%)

= $1,215,000

Miller Company

Sales $1,215,000
Variable expenses $972,000 ($1,215,000*80%)
Income before interest $243,000
Interest expense $72,000
Net income $171,000

Weaver Company

Sales $1,215,000
Variable expenses $729,000 ($1,215,000*60%)
Income before interest $486,000
Interest expense $342,000
Net income $144,000
Company Net income
Miller Co. Decrease by 14% [($198,000-$171,000)/$198,000]
Weaver Co. Decrease by 27% [($198,000-$144,000)/$198,000]
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