Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $36,800 Food and packaging $15,404 Payroll 9,300 Occupancy (rent, depreciation, etc.) 5,596 General, selling, and administrative expenses 5,400 $35,700 Income from operations $1,100 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 $2,200 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, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $36,800 Food and packaging $15,404 Payroll 9,300 Occupancy (rent, depreciation, etc.) 5,596 General, selling, and administrative expenses 5,400 $35,700 Income from operations $1,100 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 $2,200 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 | $36,800 |
| Food and packaging | $15,404 |
| Payroll | 9,300 |
| Occupancy (rent, |
5,596 |
| General, selling, and administrative expenses | 5,400 |
| $35,700 | |
| Income from operations | $1,100 |
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 $2,200 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
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