1) How many customers must visit the average McDonald’s store PER HOUR EACH DAY in order for McDonalds’ to cover all of their fixed costs (to break even)?

2) Assume that each store is open 19 hours per day (6 am to 1 am – now serving breakfast), 365 days per year. What is the fixed cost per store per hour?

3) How many customers must visit the average McDonald’s store PER HOUR EACH DAY in order for McDonalds’ to cover all of their fixed costs (to break even)?

4) Assume that each store is open 18 hours per day (6 am to midnight), BUT elects to close on Sundays (there were 52 Sundays in 2013). What is the fixed cost per store per hour?

5) How many customers must visit the average McDonald’s store PER HOUR EACH DAY in order for McDonalds’ to cover all of their fixed costs (to break even)?
 

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How many customers must pass thru the 'Golden Arches' each day? This will be an exercise in managing fixed and variable costs. The following data are derived from the 2013 10-K filing of McDonald's: 6,738 company-owned stores (in millions of dollars) Sales Food & Packaging (variable) Payroll & Employee Benefits Occupany (fixed) Operating Income We will assume two scenarios: Food & Packaging Payroll & Employee Benefits Occupany Sales 2013 1) Payroll and employee benefits are 25% fixed and 75 % variable. 2) Payroll and employee benefits are 75% fixed and 25% variable. % of Sales 18874,2 100% (6361,3) -33,7% (4824,1) -25,6% (4393,2) -23,3% 3295,6 17,5% Scenario #1 Fixed Variable 0,0% 6,4% 23,3% 29,7% 33,7% 19,2% 0,0% 52,9% 100,0% Scenario #2 Fixed Variable 0,0% 19,2% 23,3% 42,4% 33,7% 6,4% 0,0% 40,1% 100,0% Contribution Margin Ratio 46,5% 59,5% (note that these are based on rounded numbers which is why the math doesn't seem to work out exactly) How many customers must pass thru the 'Golden Arches' each day? This will be an exercise in managing fixed and variable costs. The following data are derived from the 2013 10-K filing of McDonald's: 6,738 company-owned stores (in millions of dollars) Sales Food & Packaging (variable) Payroll & Employee Benefits Occupany (fixed) Operating Income We will assume two scenarios: Food & Packaging Payroll & Employee Benefits Occupany Sales 2013 1) Payroll and employee benefits are 25% fixed and 75 % variable. 2) Payroll and employee benefits are 75% fixed and 25% variable. % of Sales 18874,2 100% (6361,3) -33,7% (4824,1) -25,6% (4393,2) -23,3% 3295,6 17,5% Scenario #1 Fixed Variable 0,0% 6,4% 23,3% 29,7% 33,7% 19,2% 0,0% 52,9% 100,0% Scenario #2 Fixed Variable 0,0% 19,2% 23,3% 42,4% 33,7% 6,4% 0,0% 40,1% 100,0% Contribution Margin Ratio 46,5% 59,5% (note that these are based on rounded numbers which is why the math doesn't seem to work out exactly)

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