For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $17,900 Food and packaging $5,200 Payroll 4,500 Occupancy (rent, depreciation, etc.) 5,060 General, selling, and administrative expenses 2,600   $17,360 Income from operations $540 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.) $fill in the blank 1 million b.  What is McDonald's contribution margin ratio? fill in the blank 2 % c.  How much would income from operations increase if same-store sales increased by $1,100 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $fill in the blank 3 million

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Contribution Margin and Contribution Margin Ratio

For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions):

Sales $17,900
Food and packaging $5,200
Payroll 4,500
Occupancy (rent, depreciation, etc.) 5,060
General, selling, and administrative expenses 2,600
  $17,360
Income from operations $540

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.)
$fill in the blank 1 million

b.  What is McDonald's contribution margin ratio?
fill in the blank 2 %

c.  How much would income from operations increase if same-store sales increased by $1,100 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
$fill in the blank 3 million

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