The cost structure of Dennis's Retail Mart is dominated by variable costs with a contribution margin...
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The cost structure of Dennis's Retail Mart is dominated by variable costs with a contribution margin ratio of 0.31 and fixed costs of $111,420. Every dollar of sales contributes 31 cents toward fixed costs and profit. The cost structure of a competitor, Oakfield Convenience Store, is dominated by fixed costs with a higher contribution margin ratio of 0.69 and fixed costs of $569,480. Every dollar of sales contributes 69 cents toward fixed costs and profit. Both companies have sales of $1,238,000 for the year. Required: a. Compare the two companies' cost structures. b. Suppose that both companies experience a 25 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 Compare the two companies' cost structures. Sales Variable cost Contribution margin Fixed costs Operating profit Dennis's Retail Mart's Amount Percentage Oakfield Convenience Store Amount Percentage % % % % di di di % % % % % % Required A Required B > The cost structure of Dennis's Retail Mart is dominated by variable costs with a contribution margin ratio of 0.31 and fixed costs of $111,420. Every dollar of sales contributes 31 cents toward fixed costs and profit. The cost structure of a competitor, Oakfield Convenience Store, is dominated by fixed costs with a higher contribution margin ratio of 0.69 and fixed costs of $569,480. Every dollar of sales contributes 69 cents toward fixed costs and profit. Both companies have sales of $1,238,000 for the year. Required: a. Compare the two companies' cost structures. b. Suppose that both companies experience a 25 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 25 percent increase in sales volume. By how much would each company's profits increase? Dennis's Retail Mart's profits increase by Oakfield Convenience Store's profits increase by < Required A Required B The cost structure of Dennis's Retail Mart is dominated by variable costs with a contribution margin ratio of 0.31 and fixed costs of $111,420. Every dollar of sales contributes 31 cents toward fixed costs and profit. The cost structure of a competitor, Oakfield Convenience Store, is dominated by fixed costs with a higher contribution margin ratio of 0.69 and fixed costs of $569,480. Every dollar of sales contributes 69 cents toward fixed costs and profit. Both companies have sales of $1,238,000 for the year. Required: a. Compare the two companies' cost structures. b. Suppose that both companies experience a 25 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 Compare the two companies' cost structures. Sales Variable cost Contribution margin Fixed costs Operating profit Dennis's Retail Mart's Amount Percentage Oakfield Convenience Store Amount Percentage % % % % di di di % % % % % % Required A Required B > The cost structure of Dennis's Retail Mart is dominated by variable costs with a contribution margin ratio of 0.31 and fixed costs of $111,420. Every dollar of sales contributes 31 cents toward fixed costs and profit. The cost structure of a competitor, Oakfield Convenience Store, is dominated by fixed costs with a higher contribution margin ratio of 0.69 and fixed costs of $569,480. Every dollar of sales contributes 69 cents toward fixed costs and profit. Both companies have sales of $1,238,000 for the year. Required: a. Compare the two companies' cost structures. b. Suppose that both companies experience a 25 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 25 percent increase in sales volume. By how much would each company's profits increase? Dennis's Retail Mart's profits increase by Oakfield Convenience Store's profits increase by < Required A Required B
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Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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