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The Greenback Store's cost structure is dominated by variable costs with a contribution margin ratio of 0.45 and fixed costs of $119,700. Every dollar
The Greenback Store's cost structure is dominated by variable costs with a contribution margin ratio of 0.45 and fixed costs of $119,700. Every dollar of sales contributes 45 cents toward fixed costs and profit. The cost structure of a competitor, One-Mart, Is dominated by fixed costs with a higher contribution margin ratio of 0.80 and fixed costs of $319,200. Every dollar of sales contributes 80 cents toward fixed costs and profit. Both companies have sales of $570,000 for the month. 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? 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 GREENBACK STORE ONE MART Amount Percentage Amount Percentage % 56 % Required A Required B> R
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