Exercise 11-12 Using fixed cost as a competitive business strategy LO 11-2 The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Kent Trent 100 100 Number of customers (a) Sales revenue (a x $250) 25,000 25,000 N/A Variable cost (a x $175) (17,500) Variable cost (a x $0) N/A 25,000 7,500 Contribution margin (17,500) Fixed cost Net income 7,500 7,500