The Greenback Stores cost structure is dominated by variable costs with a contribution margin ratio of 0.45 and fixed costs of $103,500. Every dollar of sales contributes 45 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 0.80 and fixed costs of $345,000. Every dollar of sales contributes 80 cents toward fixed costs and profit. Both companies have sales of $690,000 for the 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 companys profits increase?

Compare the two companies cost structures.

	GREENBACK STORE			ONE-MART
	Amount	Percentage		Amount	Percentage
Sales			%			%
Variable cost
Contribution margin			%			%
Fixed costs
Operating profit			%			%

Suppose that both companies experience a 15 percent increase in sales volume. By how much would each companys profits increase?

Suppose that both companies experience a 15 percent increase in sales volume. By how much would each companys profits increase?

Suppose that both companies experience a 15 percent increase in sales volume. By how much would each companys profits increase. Greenback's store profits increase by One Mart's profits increase by