Question: Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $18,700 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 | $18,700 |
| Food and packaging | $6,375 |
| Payroll | 4,700 |
| Occupancy (rent, depreciation, etc.) | 4,365 |
| General, selling, and administrative expenses | 2,700 |
| $18,140 | |
| Income from operations | $560 |
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.) $fill in the blank 1 million
b. What is Wicker Company's contribution margin ratio? Round to one decimal place. fill in the blank 2 %
c. How much would income from operations increase if same-store sales increased by $1,100 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $fill in the blank 3 million
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
