An investment banker is analyzing two companies that specialize in the production and sale of candied apples. Old-Fashioned Apples uses a labour-intensive approach, and Mech-Apple uses a mechanized system. Variable costing income statements for the two companies are shown below: Old-Fashioned Apples Mech-Apple Sales $430,000 $430,000 Variable costs 236,500 86,000 Contribution margin 193,500 344,000 Fixed costs 143,500 294,000 Operating income $50,000 $50,000 The investment banker wants to acquire one of these companies. However, she is concerned about the impact that each company's cost structure might have on its profitability. An investment banker is analyzing two companies that specialize in the production and sale of candied apples. Old-Fashioned Apples uses a labour-intensive approach, and Mech-Apple uses a mechanized system. Variable costing income statements for the two companies are shown below: Old-Fashioned Apples Mech-Apple Sales $430,000 $430,000 Variable costs 236,500 86,000 Contribution margin 193,500 344,000 Fixed costs 143,500 294,000 Operating income $50,000 $50,000 The investment banker wants to acquire one of these companies. However, she is concerned about the impact that each company's cost structure might have on its profitability.