Reference no: EM132500884
Contribution Margin and Contribution Margin Ratio
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):
Sales$36,700
Food and packaging$12,435
Payroll9,300
Occupancy (rent, depreciation, etc.)8,565
General, selling, and administrative expenses5,300 $35,600
Income from operations$1,100
Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.
Question a. What is Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)
Question b. What is Wicker Company's contribution margin ratio? Round to one decimal place.
Question c. How much would income from operations increase if same-store sales increased by $2,200 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
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