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Foxx Companys cost structure is dominated by variable costs with a contribution margin ratio of 0.30 and fixed costs of $100,800. Every dollar of sales
Foxx Companys cost structure is dominated by variable costs with a contribution margin ratio of 0.30 and fixed costs of $100,800. Every dollar of sales contributes 30 cents toward fixed costs and profit. The cost structure of a competitor, Beyonce, Inc., is dominated by fixed costs with a higher contribution margin ratio of 0.70 and fixed costs of $244,800. Every dollar of sales contributes 70 cents toward fixed costs and profit. Both companies have sales of $480,000 per month |
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