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The cost structure of Dennis's Retail Mart is dominated by variable costs with a contribution margin ratio of 0.30 and fixed costs of $85,680.

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The cost structure of Dennis's Retail Mart is dominated by variable costs with a contribution margin ratio of 0.30 and fixed costs of $85,680. Every dollar of sales contributes 30 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 0.70 and fixed costs of $550,800. Every dollar of sales contributes 70 cents toward fixed costs and profit. Both companies have sales of $1,224,000 for the year. Required: a. Compare the two companies' cost structures. b. Suppose that both companies experience a 20 percent increase in sales volume. By how much would each company's profits increase? Complete this question by entering your answers in the tabs below. Required A Required B Compare the two companies' cost structures. Sales Variable cost Contribution margin Fixed costs Operating profit Dennis's Retail Mart's Amount Percentage Oakfield Convenience Store Amount Percentage % % % % % % % % % % < Required A Required B >

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