For a recent year, McDooley's, a family-owned group of restaurants, had the following sales and expenses:
Sales for all restaurants
$345,000
Food and paper
$133,060
Payroll and employee benefits
82,500
Occupancy and other expenses
33,540
Selling, general, and administrative expenses
47,600
Other operating expenses
20,700
Net operating expenses
(317,400)
Operating income (loss)
$27,600
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 $6,900 for the coming year, with no change in the contribution
margin ratio or fixed costs?
$
