**Answer:**

a. The Company's contribution margin is $10,476 millions

b. The Company's contribution margin ratio is 27%

c. The Income from operations will increase $621 millions

**Explanation:**

In order to calculate Wicker Company's contribution margin we have to use the following formula:

contribution margin=Sales- Variable costs

Sales=$38,800 millions

Variable costs=Food and packaging+Payroll+40%General, selling, and administrative expenses

Hence, Variable costs=$16,284+$9,800+40%($5,600)=$28,324 millions

a. Therefore, contribution margin=$38,800-$28,324=**$10,476 millions**

In order to calculate the contribution margin ratio we would have to use the following formula:

contribution margin ratio=<u>contribution margin</u> × 100

Sales

contribution margin ratio=<u>**$10,476 **</u> × 100

$38,800 millions

b. contribution margin ratio=**27%**

In order to calculate how much would income from operations increase if same-store sales increased by $2,300 million for the coming year, with no change in the contribution margin ratio or fixed costs, we have to make the followinf calculation:

$2,300 million×0.27=**$621 millions**

c. Income from operations will increase $621 millions