Income statement-Cover-to-Cover Cover-to-Cover Company Biblie Files Company is making plans for its next ficeal year, and decides to ses two now types of bogksheivea, basic and Dethese The campeny has emmoind it following estimates for the new preduct offerings: products as camponents of one overall enterprise froduct calied "Combiaed, the vait contnbution margin for the Combined product abild be 12 . upcoming year are estimated at $346,500. Recall that the totals of aif the sales nux perceots must be 100%. Determine ble amounts ta mambinte itis fille ing takie. Refer again to the income statements for Cover-to-Cover Company and Brblio files Company on their respective Incorne Statement. Note inat both camistniei hres tle same sales and net income. Answer questions (2) - (3) that follow, assuming that all data for the coming year is the same as the current year, excert for the arneiti of sales 1. If Cover-ta-Cover Company wants to increase its arefit by $30,000 in the coming year, what must their amount of saies be? 2. If nobio Files Company wants to increase its pront by 130,000 in the coming year, what must their amount of caies be? 3. What would explain the difference between your answers for (1) and (2) ? a. Abilo Files Company has a higher contribution margin ratio, and so more of each sales dollar is availabie to cover fised costs and provide cheraine inceine. b. Cover-to-Cover Company's contribution margin ratio is lower, meaning that it's more efficient in its operations: c. The companies have goals that are not in the relevant range. d. The arswers are not diferent; each company has the same required saies amaunt for the coming year to achieve the deaired tarset prafie. Feesan Fonno Mr wis Examine the differences between the two campenies, including the eifferences in elements of the target profin form-le