Question
Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $31,800 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 | $31,800 |
Food and packaging | $12,102 |
Payroll | 8,000 |
Occupancy (rent, depreciation, etc.) | 6,148 |
General, selling, and administrative expenses | 4,600 |
$30,850 | |
Income from operations | $950 |
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 $1,900 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $ million
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