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For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $32,400 Food and packaging $11,628 Payroll 8,200 Occupancy (rent, depreciation, etc.) 6,902 General, selling, and administrative expenses 4,700 $31,430 $970 Income from operations 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 $1,900 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

For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $32,400 Food and packaging $11,628 Payroll 8,200 Occupancy (rent, depreciation, etc.) 6,902 General, selling, and administrative expenses 4,700 $31,430 $970 Income from operations 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 $1,900 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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $32,400 Food and packaging $11,628 Payroll 8,200 Occupancy (rent, depreciation, etc.) 6,902 General, selling, and administrative expenses 4,700 $31,430 $970 Income from operations 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 $1,900 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
Transcribed Image Text:For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $32,400 Food and packaging $11,628 Payroll 8,200 Occupancy (rent, depreciation, etc.) 6,902 General, selling, and administrative expenses 4,700 $31,430 $970 Income from operations 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 $1,900 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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