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Contribution Margin and Contribution Margin Ratio
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):
Sales
$31,900
Food and packaging
$9,619
Payroll
8,000
Occupancy (rent, depreciation, etc.)
8,721
General, selling, and administrative expenses
4,600
$30,940
Income from operations
$960
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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Transcribed Image Text:Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $31,900 Food and packaging $9,619 Payroll 8,000 Occupancy (rent, depreciation, etc.) 8,721 General, selling, and administrative expenses 4,600 $30,940 Income from operations $960 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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