Contribution Margin and Contribution Margin Ratio

For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):

Sales	$18,000
Food and packaging	$5,620
Payroll	4,500
Occupancy (rent, depreciation, etc.)	4,740
General, selling, and administrative expenses	2,600
	$17,460
Income from operations	$540

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 $1,100 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $ million

The income from operations and the amount of invested assets in each division of Devon Industries are as follows:

	Income from Operations		Invested Assets
Sporting Goods Division	$58,800		280,000
Health Care Division	91,800		510,000
Commercial Division	60,000		240,000

Assume that management has established a 12% minimum acceptable rate of return for invested assets.

a. Determine the residual income for each division.

	Sporting Goods Division			Health Care Division			Commercial Division
Income from operations	$58,800			$91,800			$60,000
Minimum amount of income from operations
Residual income	$			$			$

b. Which division has the most residual income?