Contribution Margin and Contribution Margin RatioFor a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions):Sales$12,718.9Food and packaging$ 4,033.5Payroll3,528.5Occupancy (rent, depreciation, etc.)2,847.6General, selling, and administrative expenses2,231.312,640.9Income from operations$ 78.0Assume 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).$ 4,264.4 V millionb. What is McDonald's contribution margin ratio? Round your answer to one decimal place.33.5 v %c. How much would income from operations increase if same-store sales increased by $500 million for the coming year, with no change in thecontribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place).89.5 x million

Contribution means the difference between the selling price and variable cost. Fixed cost remain…

ontribution Margin and Contribution Margin Ratio or a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): Sales $12,718.9 Food and packaging $ 4,033.5 Payroll 3,528.5 Occupancy (rent, depreciation, etc.) 2,847.6 Seneral, selling, and administrative expenses 2,231.3 12,640.9 ncome from operations $ 78.0 ssume that the variable costs consist of food and packaging; payroll; and 40% of the general, selling, and administrative expenses. . What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). 4,264.4 v million . What is McDonald's contribution margin ratio? Round your answer to one decimal place. 33.5 v % . How much would income from operations increase if same-store sales increased by $500 million for the coming year, with no change in the ontribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place). 89.5 x million

ontribution Margin and Contribution Margin Ratio or a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): Sales $12,718.9 Food and packaging $ 4,033.5 Payroll 3,528.5 Occupancy (rent, depreciation, etc.) 2,847.6 Seneral, selling, and administrative expenses 2,231.3 12,640.9 ncome from operations $ 78.0 ssume that the variable costs consist of food and packaging; payroll; and 40% of the general, selling, and administrative expenses. . What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). 4,264.4 v million . What is McDonald's contribution margin ratio? Round your answer to one decimal place. 33.5 v % . How much would income from operations increase if same-store sales increased by $500 million for the coming year, with no change in the ontribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place). 89.5 x million

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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Common-Sized Income Statement Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill's data are expressed in dollars. The electronics industry averages are expressed in percentages. Electronics Tannenhill Industry Company Average Sales $1,540,000 100 % Cost of goods sold 1,016,400 72 Gross profit $523,600 28 % Selling expenses $308,000 15 % Administrative expenses 123,200 7 Total operating expenses $431,200 22 % Operating income $92,400 6 % Other revenue 30,800 2 $123,200 8 % Other expense 15,400 1 Income before income tax $107,800 7 % Income tax expense 46,200 4 Net income $61,600 3 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers. Tannenhill Company Common-Sized Income Statement For the Year Ended December 31 Tannenhill Tannenhill…
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $20,400 Food and packaging $5,940 Payroll 5,100 Occupancy (rent, depreciation, etc.) 5,750 General, selling, and administrative expenses 3,000 $19,790 Income from operations $610 Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a. What is Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)$fill in the blank 1 million b. What is Wicker Company's contribution margin ratio? Round to one decimal place.fill in the blank 2 % c. How much would income from operations increase if same-store sales increased by $1,200 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.$fill in the blank 3 million
Contribution Margin and Contribution Margin Ratio For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and admin. expenses Other expense Total expenses Operating income (loss) $4,310 3,800 4,190 2,200 290 % $14,500 (14,790) $(290) Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, a. What is McDonald's contribution margin? Enter your answer in million, rounded to one decimal place. million b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. and nistrative expenses. c. How much would operating income increase if same-store sales increased by $900 million for the coming year, with no change in the contribution margin ratio or fixed costs?
Calculating the Times-Interest-Earned Ratio Beech Company provided the following income statement for last year: Sales $24,350,735 Cost of goods sold 15,300,000 Gross margin $9,050,735 Operating expenses 4,910,685 Operating income $4,140,050 Interest expense 470,015 Income before taxes $3,670,035 Income taxes 1,461,214 Net income $2,208,821 Required: Calculate the times-interest-earned ratio. Round the answer to one decimal place.times
Required information Skip to question [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales $ 1,500,000 Variable expenses 730, 000 Contribution margin 770, 000 Fixed expenses 470,000 Net operating income $ 300,000 Average operating assets $ 937,500 At the beginning of this year, the company has a $362, 500 investment opportunity with the following cost and revenue characteristics: Sales $ 580,000 Contribution margin ratio 70% of sales Fixed expenses $ 319,000 The company's minimum required rate of return is 10%. 8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.)
Calculating the Times-Interest-Earned Ratio Beech Company provided the following income statement for last year: Sales $24,350,735 Cost of goods sold 15,300,000 Gross margin $9,050,735 Operating expenses 4,910,685 Operating income $4,140,050 Interest expense 463,015 Income before taxes $3,677,035 Income taxes 1,461,214 Net income $2,215,821 Required: Calculate the times-interest-earned ratio. Round the answer to one decimal place.fill in the blank 1
Shown here is an income statement in the traditional format for a firm with a sales volume of 17,500 units: Revenues $ 175,500 Cost of goods sold ($11,500 + $2.95/unit) 69,025 Gross profit $ 106,475 Operating expenses: Selling ($2,000 + $1.20/unit) 25,400 Administration ($5,250 + $0.45/unit) 14,025 Operating income $ 67,050 Required: a. Prepare an income statement in the contribution margin format. Contribution Margin Income Statement Variable expenses: Total variable expenses 0 0 Fixed expenses: Total fixed expenses 0 $0 b. Calculate the contribution margin per unit and the contribution margin ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.) c|. Calculate the firm's operating income (or loss) if the volume changed from 19,500 units to 1. 24,500 units. 2. 11,500 units. d. Refer to your answer to part a when total revenues were $175,500. Calculate the firm's operating income (or loss) if unit selling price and variable expense…
Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 82,800 units during the year. Cover-to-Cover Company Biblio Files Company Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break-even sales (dollars) $ %
Income statement data for Winthrop Company for two recent years ended December 31 are as follows: 1 Current Year Previous Year 2 Sales $1,596,000.00 $1,400,000.00 3 Cost of goods sold 1,316,700.00 1,197,000.00 4 Gross profit $279,300.00 $203,000.00 5 Selling expenses $76,950.00 $67,500.00 6 Administrative expenses 55,000.00 50,000.00 7 Total operating expenses $131,950.00 $117,500.00 8 Income before income tax $147,350.00 $85,500.00 9 Income tax expense 11,060.00 7,000.00 10 Net income $136,290.00 $78,500.00 A. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. Round percentages to one decimal place. B. What conclusions can be drawn from the horizontal analysis? Round the answers to one decimal place.
A comparative income statement follows for Martine Ltd. of Montreal: MARTINE LTD. Comparative Income Statement For the Years Ended October 31, Year 1 and Year 2 Year 2 Year 1 Sales $ 8,050,000 $ 6,050,000 Less: Cost of goods sold 5,095,650 3,605,800 Gross margin 2,954,350 2,444,200 Less: Operating expenses: Selling expenses 1,529,500 1,131,350 Administrative expenses 756,700 726,000 Total expenses 2,286,200 1,857,350 Net operating income 668,150 586,850 Less: Interest expense 136,850 114,950 Net income before taxes $ 531,300 $ 471,900 Members of the company's board of directors are surprised to see that net income increased by only $59,400 when sales increased by $2,000,000. Required: 1. Express each year’s income statement in common-size percentages. (Round your answers to 1 decimal place.)
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. TannenhillCompany ElectronicsIndustryAverage Sales $800,000 100 % Cost of goods sold 512,000 70 Gross profit $288,000 30 % Selling expenses $176,000 17 % Administrative expenses 64,000 7 Total operating expenses $240,000 24 % Operating income $48,000 6 % Other revenue 16,000 2 $64,000 8 % Other expense 8,000 1 Income before income tax $56,000 7 % Income tax expense 24,000 5 Net income $32,000 2 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers.
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $41,500 Food and packaging $11,585 Payroll 10,500 Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses 12,175 6,000 $40,260 $1,240 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 Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.) $ 24,485 x million b. What is Wicker Company's contribution margin ratio? Round your answer to one decimal place. 59 X % c. How much would income from operations increase if same-store sales increased by $2,500 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. 1,475 X million.