Reference no: EM131714936

Question - Hatner Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:

Units Produced Total Costs1,705  $345,960 4,805  538,160 3,390  424,380 a. Determine the variable cost per unit and the total fixed cost.

Variable cost: (Round to the nearest dollar.)$ per unitTotal fixed cost:$b. Based on part (a), estimate the total cost for 2,340 units of production.

Total cost for 2,340 units: $ 2, For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales$26,200Food and packaging$10,220Payroll6,600Occupancy (rent, depreciation, etc.)4,790General, selling, and administrative expenses3,800 $25,410Income from operations$790Assume 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.)

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 $1,600 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.