The cost structure of Dennis's Retail Mart is dominated by variable costs with a contribution margin ratio of $0\mathrm{.}33$ and fixed costs of

$$74,520.$ Every dollar of sales contributes $33$ cents toward fixed costs and profit. The cost structure of a competitor, Oakfield

Convenience Store, is dominated by fixed costs with a higher contribution margin ratio of $0\mathrm{.}67$ and fixed costs of $$596,160.$ Every dollar

of sales contributes $67$ cents toward fixed costs and profit. Both companies have sales of $$1,242,000$ for the year.

Required:

a$.$ Compare the two companies' cost structures.

b$.$ Suppose that both companies experience a $10$ percent increase in sales volume. By how much would each company's profits

increase?

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Compare the two companies' cost structures.