Responsibility Income Statement Classico's Pizza,a Chain of Pizza Parlors,views Each Branch Location as Branch

question 64

Essay

Responsibility income statement
Classico's Pizza,a chain of pizza parlors,views each branch location as an investment center.The local branch reported the following results for the current year: Compute 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 result from a 10% increase in sales volume: $_______________

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Definitions:

Operating Activities

Activities that relate to the core operations of a company, including the production, distribution, and sale of goods and services.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired.

Investing Activities

Activities related to the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Cash Flows

The movement of cash into or out of a business, project, or financial product as it generates income or pays expenses.