C. How much would income from operations increase if same-store sales increased by $500 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place).
C. How much would income from operations increase if same-store sales increased by $500 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Please answer part c with explanation thx
Transcribed Image Text:For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions):
Sales
$18,169.3
Food and packaging
$ 6,129.7
Payroll
4,756.0
Occupancy (rent, depreciation, etc.)
4,402.6
General, selling, and administrative expenses
2,487.9
17,776.2
Income from operations
$ 393.1
Assume that the variable costs consist of food and packaging; payroll; and 40% of the general, selling, and
administrative expenses.
a. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place).
$ 6,288,4 million
b. What is McDonald's contribution margin ratio? Round to one decimal place.
34.6 %
C. How much would income from operations increase if same-store sales increased by $500 million for the coming
year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a
million (one decimal place).
million
Previous
Next
7:02 PM
100%
A O E G 40)
11/29/2020
Insert
Delete
Backspace
Num
Lock
8.
Home
Enter
BN M <
Shift
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education