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Contribution Margin and The percentage of each sales dollar that is available to cover the fixed costs and provide an operating income.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 $15,295.0 $(4,896.9) Payroll (4,134.2) Occupancy (rent, depreciation, etc.) (3,667.7) General, selling, and administrative expenses (2,384.5) Operating income $(15,083.3) $211.7 Assume that the Costs that vary in total dollar amount as the level of activity changes.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). $ million b. What is McDonald's contribution margin ratio? Round to one decimal place. % c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or Costs that tend to remain the same in amount, regardless of variations in the level of activity.fixed costs? Round your answer to the nearest tenth of a million (one decimal place). $ million

Contribution Margin and The percentage of each sales dollar that is available to cover the fixed costs and provide an operating income.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 $15,295.0 $(4,896.9) Payroll (4,134.2) Occupancy (rent, depreciation, etc.) (3,667.7) General, selling, and administrative expenses (2,384.5) Operating income $(15,083.3) $211.7 Assume that the Costs that vary in total dollar amount as the level of activity changes.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). $ million b. What is McDonald's contribution margin ratio? Round to one decimal place. % c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or Costs that tend to remain the same in amount, regardless of variations in the level of activity.fixed costs? Round your answer to the nearest tenth of a million (one decimal place). $ million

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Contribution Margin and The percentage of each sales dollar that is available to cover the fixed costs and provide an operating income.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 $15,295.0 $(4,896.9) Payroll (4,134.2) Occupancy (rent, depreciation, etc.) (3,667.7) General, selling, and administrative expenses (2,384.5) Operating income $(15,083.3) $211.7 Assume that the Costs that vary in total dollar amount as the level of activity changes.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). $ million b. What is McDonald's contribution margin ratio? Round to one decimal place. % c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or Costs that tend to remain the same in amount, regardless of variations in the level of activity.fixed costs? Round your answer to the nearest tenth of a million (one decimal place). $ million
Transcribed Image Text:Contribution Margin and The percentage of each sales dollar that is available to cover the fixed costs and provide an operating income.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 $15,295.0 $(4,896.9) Payroll (4,134.2) Occupancy (rent, depreciation, etc.) (3,667.7) General, selling, and administrative expenses (2,384.5) Operating income $(15,083.3) $211.7 Assume that the Costs that vary in total dollar amount as the level of activity changes.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). $ million b. What is McDonald's contribution margin ratio? Round to one decimal place. % c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or Costs that tend to remain the same in amount, regardless of variations in the level of activity.fixed costs? Round your answer to the nearest tenth of a million (one decimal place). $ million
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