Business, 23.09.2019 15:30 sofia3226

The greenback store’s cost structure is dominated by variable costs with a contribution margin ratio of 0.40 and fixed costs of $100,800. every dollar of sales contributes 40 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 0.70 and fixed costs of $244,800. every dollar of sales contributes 70 cents toward fixed costs and profit. both companies have sales of $480,000 for the month. 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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