Spring Company's cost structure is dominated by variable costs with a contribution margin ratio of 0.20 and fixed costs of $60,000. Every dollar of sales contributes 20 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 $310,000. Every dollar of sales contributes 70 cents toward fixed costs and profit. Both companies have sales of $500,000 per month Required a. Compare the two companies' cost structures SPRING C WINTERS COMPANY Sales Variable cost Contribution margins Fixed costs Operating profit 500,000 400,000 100,000 60,000 500,000 150,000 350,000 80 30 201% $ 701 % b. Suppose that both companies experience a 8 percent increase in sales volume. By how much would each company's profits increase? Spring Company's profits increase by $ Winter Company's profits increase by28,000 8,000