Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $29,100 Food and packaging $10,226 Payroll 7,300 Occupancy (rent, depreciation, etc.) 6,504 General, selling, and administrative expenses 4,200 $28,230 Income from operations $870 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 $1,700 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. million
Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $29,100 Food and packaging $10,226 Payroll 7,300 Occupancy (rent, depreciation, etc.) 6,504 General, selling, and administrative expenses 4,200 $28,230 Income from operations $870 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 $1,700 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. million
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Contribution Margin and Contribution Margin Ratio
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):
Sales
$29,100
Food and packaging
$10,226
Payroll
7,300
Occupancy (rent, depreciation, etc.)
6,504
General, selling, and administrative expenses
4,200
$28,230
Income from operations
$870
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 $1,700 million for the coming year, with no change in the contribution
margin ratio or fixed costs? Round your answer to the closest million.
million](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1516f125-856f-4026-8d08-7de3645b541e%2Fa7d7937c-a168-455d-97a2-30a94b1ff951%2Fu9opclx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Contribution Margin and Contribution Margin Ratio
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):
Sales
$29,100
Food and packaging
$10,226
Payroll
7,300
Occupancy (rent, depreciation, etc.)
6,504
General, selling, and administrative expenses
4,200
$28,230
Income from operations
$870
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 $1,700 million for the coming year, with no change in the contribution
margin ratio or fixed costs? Round your answer to the closest million.
million
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