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I included my work below. Not sure why my answer isn't correct. I subtracted the old profit from the new profit taking into account the
I included my work below. Not sure why my answer isn't correct. I subtracted the old profit from the new profit taking into account the decrease in sales.
Couzen's Company's cost structure is dominated by variable costs with a contribution margin ratio of 0.28 and fixed costs of $490,500. Every dollar of sales contributes 28 cents toward fixed costs and profit. The cost structure of a competitor, Jones \& Family, is dominated by fixed costs with a higher contribution margin ratio of 0.78 and fixed costs of $2,534,250. Every dollar of sales contributes 78 cents toward fixed costs and profit. Both companies have sales of $4,087,500 annually. Required: a. Compare the two companies' cost structures. b. Suppose that both companies experience a 12 percent decrease in sales volume. By how much would each company's profits decrease? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Suppose that both companies experience a 12 percent decrease in sales volume. By how much would each company's profits decrease
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