Question
Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales : $19,700 Food
Contribution Margin and Contribution Margin Ratio
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):
Sales : $19,700
Food and Packaging: $7630
Payroll: $5000
Occupancy: $3580
General expenses: $2,900
Total: $19,110
Income from operations: $590
a. What is Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.
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 $1,200 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
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