Company Name

Larson

Variable cost per unit

$($

a

$)$

$$$

$2$

$1$

$.$

$0$

$0$

$$

Sales revenue

$($

$8$

$,$

$4$

$0$

$0$

$$units

$\backslash$

times $

$2$

$9$

$.$

$0$

$0$

$)$

$$$

$2$

$4$

$3$

$,$

$6$

$0$

$0$

$$

Variable cost

$($

$8$

$,$

$4$

$0$

$0$

$$units

$\backslash$

times a

$)$

$($

$1$

$7$

$6$

$,$

$4$

$0$

$0$

$)$

Contribution margin $

$6$

$7$

$,$

$2$

$0$

$0$

$$

Fixed cost

$($

$2$

$4$

$,$

$4$

$0$

$0$

$)$

Net income $

$4$

$2$

$,$

$8$

$0$

$0$

Benson

Variable cost per unit

$($

a

$)$

$$$

$1$

$0$

$.$

$5$

$0$

Sales revenue

$($

$8$

$,$

$4$

$0$

$0$

$$units

$\backslash$

times $

$2$

$9$

$.$

$0$

$0$

$)$

$$$

$2$

$4$

$3$

$,$

$6$

$0$

$0$

Variable cost

$($

$8$

$,$

$4$

$0$

$0$

$$units

$\backslash$

times a

$)$

$($

$8$

$8$

$,$

$2$

$0$

$0$

$)$

Contribution margin $

$1$

$5$

$5$

$,$

$4$

$0$

$0$

Fixed cost

$($

$1$

$1$

$2$

$,$

$6$

$0$

$0$

$)$

Net income $

$4$

$2$

$,$

$8$

$0$

$0$

If the economy contracts in coming years, Larson and Benson will both suffer a $11$ percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. $($Note: Since the $$number of units decreases, both total revenue and total variable cost will decrease.$)$