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The cost structure of Dennis's Retail Mart is dominated by variable costs with a contribution margin ratio of 0 . 3 0 and fixed costs

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 $98,880. 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 $556,200. Every dollar of sales contributes 70 cents toward fixed costs and profit. Both companies have sales of $1,236,000 for the year.
Required:
a. Compare the two companies' cost structures.
b. Suppose that both companies experience a 15 percent increase in sales volume. By how much would each company's profits increase?
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Compare the two companies' cost structures.
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