Reference no: EM132748094
Question: Contribution Margin and Contribution Margin Ratio
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):
Sales $41,900 Food and packaging $17,966 Payroll 10,600 Occupancy (rent, depreciation, etc.) 5,974 General, selling, and administrative expenses 6,100 $40,640 Income from operations $1,260 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.)
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 $2,500 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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