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

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

Sales $33,800
Food and packaging $9,820
Payroll 8,500
Occupancy (rent, depreciation, etc.) 9,570
General, selling, and administrative expenses 4,900
$32,790
Income from operations $1,010

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 $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.
$ million

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ReportAnswer #1

Contribution margin = Sales revenue - Variable costs

= 33,800 - [9820+8500+(40%*4900)]

= 13,520

Contribution margin ratio = Contribution margin/Sales

= 13,520/33,800

= 40%

Increase in operations = 2000 million * 40%

= 800 million

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