Contribution margin and contribution margin ratioFor a recent year, Mcdonald's company-owned restaurants bad thefollowing sales and expenses (in millions): Sales $18,169.3 Food and packaging $6,129.7 Payroll 4,756.0 Occupancy (rent, depreciation, etc.) 4,402.6 General, selling, and administrative expenses 2,487.9 $17,776.2 Income from operations $ 393.1 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 nearesttenth of a million (one decimal place).b. What is Mcdonald's contribution margin ratio? Round to onedecimal place. c. How much would income from operations increase if same-store sales increased by $500 million for the coming year, with nochange in the contribution margin ratio or fixed costs? Round youranswer to the nearest tenth of a million (one decimal place).
Contribution margin and contribution margin ratioFor a recent year, Mcdonald's company-owned restaurants bad thefollowing sales and expenses (in millions): Sales $18,169.3 Food and packaging $6,129.7 Payroll 4,756.0 Occupancy (rent, depreciation, etc.) 4,402.6 General, selling, and administrative expenses 2,487.9 $17,776.2 Income from operations $ 393.1 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 nearesttenth of a million (one decimal place).b. What is Mcdonald's contribution margin ratio? Round to onedecimal place. c. How much would income from operations increase if same-store sales increased by $500 million for the coming year, with nochange in the contribution margin ratio or fixed costs? Round youranswer to the nearest tenth of a million (one decimal place).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Contribution margin and contribution margin ratio
For a recent year, Mcdonald's company-owned restaurants bad the
following sales and expenses (in millions):
| Sales | $18,169.3 |
| Food and packaging | $6,129.7 |
| Payroll | 4,756.0 |
| Occupancy (rent, |
4,402.6 |
| General, selling, and administrative expenses | 2,487.9 |
| $17,776.2 | |
| Income from operations | $ 393.1 |
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
tenth of a million (one decimal place).
b. What is Mcdonald's contribution margin ratio? Round to one
decimal place.
c. How much would income from operations increase if same-
store sales increased by $500 million for the coming year, with no
change in the contribution margin ratio or fixed costs? Round your
answer to the nearest tenth of a million (one decimal place).
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