The Greenback Stores 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 toward 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. Every dollar of sales contributes 70 cents toward fixed costs and profit. Both companies have sales of $480,000 for the month.

Required:

a. Compare the two companies cost structures.

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

Required A Required B Compare the two companies' cost structures. GREENBACK STORE Amount Percentage ONE-MART Amount Percentage Sales Variable cost Contribution margin Fixed costs Operating profit Required A Required B Suppose that both companies experience a 10 percent increase in sales volume. By how much would each company's profits increase? Greenback Store's profits increase by One-Mart's profits increase by