Target Profit Refer again to the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Incon Note that both companies have the same sales and net income. Answer questions (1) - (3) that follow, assuming that the coming year is the same as the current year, except for the amount of sales. 1. If Cover-to-Cover Company wants to increase its profit by $20,000 in the coming year, what must their amount of 2. If Biblio Files Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales 3. What would explain the difference between your answers for (1) and (2)? a. Biblio Files Company has a higher contribution margin ratio, and so more of each sales dollar is available to cover fix provide operating income. 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. The answers are not different; each company has the same required sales amount for the coming year to achieve the Check my work Email Instructor All work saved Submit Assign Save and Exit Cover to Cover Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales $374,000 Variable costs: Manufacturing expense $224,400 Selling expense 18,700 Administrative expense 56,100 (299,200) Contribution margin $74,800 Fixed costs: Manufacturing expense $5,000 Selling expense 4,000 Administrative expense 9,700 (18,700) $56,100 Operating income Income Statement - Biblio Files Biblio Files Company Contribution Margin Income Statement Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 2018 $374,000 Sales Variable costs: Manufacturing expense $149,600 Selling expense 14,960 59,840 (224,400) Administrative expense Contribution margin $149,600 Fixed costs: Manufacturing expense $75,500 8,000 10,000 Selling expense Administrative expense Operating income (93,500) $56,100 Sales Mix Biblio Files Company is making plans for its next fiscal year, and decides to sell two new type Check