Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses $38,600 $(10,062) b. What is McDonald's contribution margin ratio? 44 X % (9,700) (12,078) (5,600) $(37,440) $1,160 Operating income 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 million. (Give answer in millions of dollars.) 10,428 X million. c. How much would operating income 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? Round your answer to the closest million. 710 X million
Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses $38,600 $(10,062) b. What is McDonald's contribution margin ratio? 44 X % (9,700) (12,078) (5,600) $(37,440) $1,160 Operating income 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 million. (Give answer in millions of dollars.) 10,428 X million. c. How much would operating income 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? Round your answer to the closest million. 710 X million
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Contribution Margin and Contribution Margin Ratio
For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions):
Sales
Food and packaging
Payroll
Occupancy (rent, depreciation, etc.)
General, selling, and administrative expenses
$38,600
$(10,062)
(9,700)
(12,078)
(5,600)
$(37,440)
$1,160
Operating income
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 million. (Give answer in millions of dollars.)
10,428 X million
b. What is McDonald's contribution margin ratio?
44 X %
c. How much would operating income 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? Round your answer to the closest million.
710 X million
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