Spring Company's cost structure is dominated by variable costs with a contribution margin ratio of 0.25 and fixed costs of $20,000. Every dollar of sales contributes 25 cents toward fixed costs and profit. The cost structure of a competitor, Winters Company, is dominated by fixed costs with a higher contribution margin ratio of 0.70 and fixed costs of $200,000. Every dollar of sales contributes 70 cents toward fixed costs and profit. Both companies have sales of $400,000 per 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 WINTERS COMPANY Amount Percentage 100% Compare the two companies' cost structures. SPRING COMPANY Amount Percentage Sales $ 400,000 1001 % Variable cost 70 Contribution margin 30 % Fixed costs 7 Operating profit 23 % 30 70% 47 23% Required A Required B > Spring Company's cost structure is dominated by variable costs with a contribution margin ratio of 0.25 and fixed costs of $20,000. Every dollar of sales contributes 25 cents toward fixed costs and profit. The cost structure of a competitor, Winters Company, is dominated by fixed costs with a higher contribution margin ratio of 0.70 and fixed costs of $200,000. Every dollar of sales contributes 70 cents toward fixed costs and profit. Both companies have sales of $400,000 per 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 Suppose that both companies experience a 15 percent increase in sales volume. By how much would each company's profits increase? S Spring Company's profits increase by Winter Company's profits increase by 24,000 56,000 S