Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $14,500 Food and

Contribution Margin and Contribution Margin Ratio

For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):

Sales $14,500
Food and packaging $4,450
Payroll 3,700
Occupancy (rent, depreciation, etc.) 3,820
General, selling, and administrative expenses 2,100
$14,070
Income from operations $430

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 $900 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $ million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Gleim CIA Review Part 3 Internal Audit Knowledge Elements

Authors: Irvin N. Gleim

2018 Edition

1618541153, 978-1618541154

More Books

Students also viewed these Accounting questions