Question: Spring Company's cost structure is dominated by variable costs with a contribution margin ratio of 0.25 and fixed costs of $55,200. Every dollar of sales

 Spring Company's cost structure is dominated by variable costs with a

Spring Company's cost structure is dominated by variable costs with a contribution margin ratio of 0.25 and fixed costs of $55,200. 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 0.80 and fixed costs of $308,200. Every dollar of sales contributes 80 cents toward fixed costs and profit. Both companies have sales of $460,000 per month. Required: a. Compare the two companies' cost structures. SPRING COMPANY WINTERS COMPANY AmountPercentage AmountPercentage Sales Variable cost Contribution margin Fixed costs Operating profit b. Suppose that both companies experience a 15 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 by

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