Listel Rx and Risen, Inc. are two companies in the pharmaceutical industry. Listel Rx does little research and development. Instead, the
company pays for the right to produce and market drugs that have been developed by other companies. The amount paid is a percent
of sales. Information for the current year follows:
Sales
Listel Rox
$180,000
Risen, Inc.
$116,000
Less variable costs
74,000
62,000
Contribution margin
106,000
54,000
Less fixed costs
40,000
36,000
Profit
$ 66,000
$ 18,000
(a)
Your answer is incorrect.
Calculate the expected percentage change in profit for a 25 percent decrease in sales for each company. (Round answers to 2
decimal places, eg. 25.52%)
Percentage decrease
Listel Rx
%
Risen, Inc.
%