For a recent year, McDooley's, a family-owned group of restaurants, had the following sales and...
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Accounting
For a recent year, McDooley's, a family-owned group of restaurants, had the following sales and expenses:
Line Item Description
Amount
Amount
Sales by company-operated restaurants
$287,000
Food and paper
$99,140
Payroll and employee benefits
68,700
Occupancy and other expenses
39,380
Selling, general, and administrative expenses
39,600
Other operating expenses (income)
17,220
Net operating expenses
(264,040)
Operating income (loss)
$22,960
Assume that the variable costs consist of food and paper, payroll and employee benefits, and 40% of the selling, general, and administrative expenses.
a. What is McDooley's contribution margin?
b. What is McDooley's contribution margin ratio? Round your percentage answer to one decimal place. ___%
c. How much would operating income increase if the stores sales increased by $5,700 for the coming year, with no change in the contribution margin ratio or fixed costs?
d. What would have been the operating income or loss for the recent year if sales had been $5,700 more? Use a minus sign to indicate an operating loss.
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