Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $40,800 Food and packaging $11,004 Payroll 10,300 Occupancy (rent, depreciation, etc.) 12,376 General, selling, and administrative expenses 5,900 $39,580 Income from operations $1,220 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.) $________ million b. What is McDonald's contribution margin ratio? ________% c. How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $_________ 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 $40,800 Food and packaging $11,004 Payroll 10,300 Occupancy (rent, depreciation, etc.) 12,376 General, selling, and administrative expenses 5,900 $39,580 Income from operations $1,220 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.) $ million b. What is McDonald's contribution margin ratio? % c. How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $_ million

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Contribution margin and contribution margin ratio For a recent year, McDonalds (MCD) company-owned...

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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	$40,800
Food and packaging	$11,004
Payroll	10,300
Occupancy (rent, depreciation, etc.)	12,376
General, selling, and administrative expenses	5,900
	$39,580
Income from operations	$1,220

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.)
$________ million

b. What is McDonald's contribution margin ratio?
________%

c. How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
$_________ million

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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