Contribution margin and contribution margin ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and paper Payroll and employee benefits Occupancy and other expenses $19,000 $(2,600) (2,000) (4,300) General, selling, and administrative expenses (3,100) $(12,000) $7,000 Operating income Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? 11,840 X million b. What is McDonald's contribution margin ratio? Round to one decimal place. 61.2 X % c. How much would operating income increase if same-store sales increased by $800 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). 550.8 x million Feedback Check My Work a. Sales minus total variable costs equals contribution margin. b. Contribution margin divided by sales equals contribution margin ratio. c. Multiply the sales increase by the contribution margin percentage.