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 to 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. Each dollar of sales contributes 70 cents to fixed costs and sales. Profits. Both companies have sales of $480,000 for the month.

Required:

to. Compare the cost structures of the two companies.

b. Suppose that both companies experience a 10 percent increase in sales volume. By how much would the profits of each company increase?