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

Question
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

Image Transcription

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

Expert Answer

1 Rating

Want to see the step-by-step answer?

See Answer

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Answer
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.
Tagged in
BusinessAccounting

Cost Accounting

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Pearl Enterprises purchased store equipment by making a $2,960 cash down payment and signing a 1-yea...

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: June 1   Purchased books on account for $2,580 (including freight) from Catlin Publishers, terms 2/1...

A: Prepare the journal entry from June 1 to June 17.

Q: Sales Mix and Break-Even Analysis Heyden Company has fixed costs of $399,970. The unit selling price...

A: Break even sales is the dollar amount of revenue at which a business earns a profit of zero i.e. No ...

Q: Payable Transactions Richmond Company engaged in the following transactions during 2013: Purchased ...

A: 1. Prepare journal enries:

Q: Sophia & More Company sells clothing, shoes and accessories at a city location near you. Informa...

A: Income Statement as per Variable Costing

Q: Support department cost allocation—direct method Becker Tabletops has two support departments (Janit...

A: Hence, the Janitorial department cost which is allocated to cutting department costs is $58,000. The...

Q: geNOWv21 Online teachir X keAssignment/takeAssignmentMain.do?invoker-assignments&takeAssignmentSessi...

A: a.  Prepare journal entry to record sale of merchandise for cash and the cost of goods sold.

Q: Why are the following items listed as a DR?  Aren't they CR accounts?  Exp;enses are CR accounts are...

A: Expenses are the payments that a company made to acquire something or for the benefit of the company...

Q: (Computing bad debts and preparing journal enteries) - the trial balance before adjustment of Taylor...

A: (a)Prepare journal entry to record  estimated bad debts assuming that the allowance is to provide fo...