Question: Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): Sales $18,602.5 Food and

Contribution Margin and Contribution Margin Ratio

For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions):

Sales

$18,602.5

Food and packaging

$ 6,318.2

Payroll

4,710.3

Occupancy (rent, depreciation, etc.)

4,195.2

General, selling, and administrative expenses

2,445.2

17,668.9

Income from operations

$ 933.6

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). $ million

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 $900 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). $ million

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