Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales
Question:
Contribution Margin and Contribution Margin Ratio
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):
Sales | $33,500 |
Food and packaging | $13,995 |
Payroll | 8,500 |
Occupancy (rent, depreciation, etc.) | 5,105 |
General, selling, and administrative expenses | 4,900 |
$32,500 | |
Income from operations | $1,000 |
Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.
a. What is Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)
$ million
b. What is Wicker Company's contribution margin ratio? Round to one decimal place.
%
c. How much would income from operations increase if same-store sales increased by $2,000 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
$ million
Accounting
ISBN: 978-1337899451
27th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac