Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Sales and costs for each product follow. Product T Product O Sales . . . . . . . . . . . . . . . . . . . . . . . . . $800,000 $800,000 Variable costs . . . . . . . . . . . . . . . . . . 560,000 1 00,000 Contribution margin . . . . . . . . . . . . 240,000 700,000 Fixed costs . . . . . . . . . . . . . . . . . . . . 1 00,000 560,000 Income before taxes . . . . . . . . . . . . 1 40,000 1 40,000 Income taxes (32% rate) . . . . . . . . . 44,800 44,800 Net income . . . . . . . . . . . . . . . . . . . $ 95,200 $ 95,200 Required Analysis Component 4. If sales greatly decrease, which product would experience a greater loss? Explain. 5. Describe some factors that might have created the different cost structures for these two products