7. Responsibility income statementClassico's Pizza, a chain of pizza parlors, views each branch location as aninvestment center. The local branch reported the following results for thecurrent year:SalesVariable expensesTraceable fixed costs..Average total assets of the branch$3,600,000$2,970,000$270,000$1,440,000Compute the following measures for this investment center:(a) Contribution margin: $(b) Contribution margin ratio:(c) Responsibility margin: $_(d) Increase in annual responsibility margin that would be expected to resultfrom a 10% increase in sales volume: $__%

Solution : Sales = $3,600,000 Variable Expenses = $2,970,000 Fixed cost = $270,000

Answered: Classico's Pizza, a chain of pizza…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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