The Dollar Store cost structure is dominated by variable costs with a contribution margin ratio of .30 and fixed costs of $30,000. every dollar of sales contributes 30 cents toward fixed costs and profit. the cost structure of a competitor.One-Mart, is dominated by fixed costs with a high contribution margin ration of.80 and fixed of $280,000.every dollar of sales contributes 80 cents toward fixed costs and profit.both companies have sales of $500,000 for the month.
Required A_ compare the two companies cost structure using the format shown in exhibit 3.5. B_ suppose the both companies experience a 15 percent increase in sales. by how much would each company s profit increase? this is 3-25 chapter 3, fundamental of cost accounting by lanen.