Question
For a recent year, Wicker Company, a business consisting of company-owned restaurants, had the following sales and expenses (in millions): Sales $17,200 Food and packaging
For a recent year, Wicker Company, a business consisting of company-owned restaurants, had the following sales and expenses (in millions):
Sales | $17,200 |
Food and packaging | $5,880 |
Payroll | 4,300 |
Occupancy (rent, depreciation, etc.) | 4,000 |
General, selling, and administrative expenses | 2,500 |
$16,680 | |
Income from operations | $520 |
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? $ million
b. What is Wicker Company's contribution margin ratio? %
c. How much would income from operations increase if same-store sales increased by $1,000 million for the coming year, with no change in the contribution margin ratio or fixed costs? $ million
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