Contribution margin ratio
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For a recent year, Wicker Company had the following sales and expenses:
Sales $14,700
Food and packaging $4,133
Payroll 3,700
Occupancy (rent, depreciation, etc.) 4,327
General, selling, and administrative expenses 2,100
$14,260
Income from operations $440
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?
$
b. What is Wicker Company's contribution margin ratio?
%
c. How much would income from operations increase if same-store sales increased by $900 for the coming year, with no change in the contribution margin ratio or fixed costs?
$
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The solution assists in calculating contribution margin ratio.
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For a recent year, Wicker Company had the following sales and expenses:
Sales $14,700
Food and packaging $4,133
Payroll 3,700
Occupancy (rent, depreciation, etc.) 4,327
General, selling, and administrative expenses 2,100
$14,260
Income from ...
Purchase this Solution
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