The Greenback Store's cost structure is dominated by variable costs with a contribution margin ratio of...

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The Greenback Stores cost structure is dominated by variable costs with a contribution margin ratio of 0.40 and fixed costs

business accounting

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Answer 1

Answer #1

Answer:

a).

	GREENBACK STORE		ONE-MART
	Amount	Percentage	Amount	Percentage
Sales	650,000	100%	650,000	100%
Variable Costs	390,000	60%	130,000	20%
Contribution Margin	260,000	40%	520,000	80%
Fixed costs	78,000	12%	338,000	52%
Operating Profit	182,000	28%	182,000	28%

b).

Greenback Stores profit increased by	26,000
One-marts profit increased by	52,000

Calculation :

= Contribution Margin*(Sales*Increase %)

Greenback Stores = 0.40*(650000*0.10) = 26,000

One-Mart = 0.80*(650000*0.10) = 52,000

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Answer 2

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