Problem: Module 5 Textbook Problem 3 Learning Objectives: . 5-3 Identify and describe fixed, variable, and mixed cost behavior 5-4 Demonstrate the effects of operating leverage on profitability The following income statements illustrate different cost structures for two competing companies: Income Statements Number of customers (a) Sales revenue (a * $220) Variable cost (a * $190) Variable cost (a * $e) Contribution margin Fixed cost Net income Company Name Rooney Rundle 83 83 $ 18,260 $ 18,260 N/A (15,770) N/A 18,260 2,490 (15,770) $ 2,490 $ 2,490 Required a. Reconstruct Rooney's income statement, assuming that it serves 166 customers when it lures 83 customers away from Rundle by lowering the sales price to $120 per customer. b. Reconstruct Rundle's income statement, assuming that it serves 166 customers when it lures 83 customers away from Rooney by lowering the sales price to $120 per customer, Required A Required B Reconstruct Rooney's income statement, assuming that it serves 166 customers when it lures 83 customers away from Rundle by lowering the sales price to $120 per customer. ROONEY COMPANY Income Statement Sales revenue Variable cost Contribution margin Fixed cost Net Income (loss)