Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $32,600 Food and packaging $13,718 Payroll 8,200 Occupancy (rent, depreciation, etc.) 5,002 General, selling, and administrative expenses 4,700 $31,620 Income from operations $980 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.) $fill in the blank 1 million b. What is Wicker Company's contribution margin ratio? Round to one decimal place. fill in the blank 2 % c. How much would income from operations increase if same-store sales increased by $2,000 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $32,600 Food and packaging $13,718 Payroll 8,200 Occupancy (rent, depreciation, etc.) 5,002 General, selling, and administrative expenses 4,700 $31,620 Income from operations $980 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.) $fill in the blank 1 million b. What is Wicker Company's contribution margin ratio? Round to one decimal place. fill in the blank 2 % c. How much would income from operations increase if same-store sales increased by $2,000 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest 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 | $32,600 |
| Food and packaging | $13,718 |
| Payroll | 8,200 |
| Occupancy (rent, |
5,002 |
| General, selling, and administrative expenses | 4,700 |
| $31,620 | |
| Income from operations | $980 |
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.)
$fill in the blank 1 million
b. What is Wicker Company's contribution margin ratio? Round to one decimal place.
fill in the blank 2 %
c. How much would income from operations increase if same-store sales increased by $2,000 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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