What is wicker companys contribution margin

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Reference no: EM131970298

Problem

For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):

Sales $32,400
Food and packaging $8,388
Payroll 8,200
Occupancy (rent, depreciation, etc.) 10,142
General, selling, and administrative expenses 4,700
$31,430
Income from operations $970

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 $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.

Reference no: EM131970298

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