Photo Mart Company is a provider of imaging technology products and services to the photographic, graphic communications, and health-care markets. A condensed 2011 income statement follows (in millions): (Click the icon to view the data.) Assume that $1,700 million of the cost of goods sold is a fixed cost representing depreciation and other production costs that do not change with the volume of production. In addition, $1,600 million of the other operating expenses is fixed. Requirements 1. Compute the total contribution margin for 2011 and the contribution margin percentage. Explain why the contribution margin differs from the gross margin. 2. Suppose that sales for Photo Mart are predicted to increase by 15% and that the cost behavior is expected to continue. Compute the predicted operating income (loss). 3. What assumptions were necessary to compute the predicted operating income in requirement 2? Next, determine the formula to calculate the contribution margin percentage. Then, enter the amounts in the formula to compute the contribution margin percentage. (Enter the contribution margin percentage as a percent rounded to two decimal places, X.XX%.) Contribution margin percentage = = million | million % Explain why the contribution margin differs from the gross margin. The contribution margin is he variable costs include V, while gross margin is V The contribution margin V the gross margin. Requirement 2. Suppose that sales for Photo Mart are predicted to increase by 15% and that the cost behavior is expected to continue. Compute the predicted operating income (loss). (Round all amounts to the nearest million. Use a minus sign or parentheses for a loss.) Choose from any list or enter any number in the input fields and then continue to the next question. Photo Mart Company is a provider of imaging technology products and services to the photographic, graphic communications, and health-care markets. A condensed 2011 income statement follows (in millions): : (Click the icon to view the data.) Assume that $1,700 million of the cost of goods sold is a fixed cost representing depreciation and other production costs that do not change with the volume of production. In addition, $1,600 million of the other operating expenses is fixed. Requirements 1. Compute the total contribution margin for 2011 and the contribution margin percentage. Explain why the contribution margin differs from the gross margin. 2. Suppose that sales for Photo Mart are predicted to increase by 15% and that the cost behavior is expected to continue. Compute the predicted operating income (loss). 3. What assumptions were necessary to compute the predicted operating income in requirement 2? Requirement 2. Suppose that sales for Photo Mart are predicted to increase by 15% and that the cost behavior is expected to continue. Compute the predicted operating income (loss). (Round all amounts to the nearest million. Use a minus sign or parentheses for a loss.) (In millions) Operating income (loss) Requirement 3. What assumptions were necessary to compute the predicted operating income in requirement 2? (Select all that apply.) 2011 volume has increased significantly. 2011 volume is within the relevant range. Changes in inventory levels are insignificant. Costs and revenues are linear within the relevant range. Costs and revenues are nonlinear within the relevant range. Efficiency and productivity are unchanged. Efficiency and productivity have improved. Expenses can be classified into variable and fixed categories that completely describe their behavior within the relevant range. Inventory levels have gone up significantly from the prior year. Sales mix is unchanged. Sales mix has changed. Data Table Sales 8,900 6,829 Cost of goods sold Gross margin 2,071 Other operating expenses 2,416 Loss from continuing operations (345) Print Done Photo Mart Company is a provider of imaging technology products and services to the photographic, graphic communications, and health-care markets. A condensed 2011 income statement follows (in millions): (Click the icon to view the data.) Assume that $1,700 million of the cost of goods sold is a fixed cost representing depreciation and other production costs that do not change with the volume of production. In addition, $1,600 million of the other operating expenses is fixed. Requirements 1. Compute the total contribution margin for 2011 and the contribution margin percentage. Explain why the contribution margin differs from the gross margin. 2. Suppose that sales for Photo Mart are predicted to increase by 15% and that the cost behavior is expected to continue. Compute the predicted operating income (loss). 3. What assumptions were necessary to compute the predicted operating income in requirement 2? Requirement 1. Compute the total contribution margin for 2011 and the contribution margin percentage. Explain why the contribution margin differs from the gross margin. Begin by determining the formula to calculate the contribution margin. Then, enter the amounts in the formula to compute the contribution margin of Photo Mart Company. Sales million - Total variable expenses v = million = Contribution margin million Choose from any list or enter any number in the input fields and then continue to the next