Question: Contribution Margin and Contribution Margin Ratio For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $15,295.0 Food
Contribution Margin and Contribution Margin Ratio
For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions):
| Sales | $15,295.0 |
| Food and packaging | $(4,896.9) |
| Payroll | (4,134.2) |
| Occupancy (rent, depreciation, etc.) | (3,667.7) |
| General, selling, and administrative expenses | (2,384.5) |
| $(15,083.3) | |
| Operating income | $211.7 |
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). $fill in the blank 1 million
b. What is McDonald's contribution margin ratio? Round to one decimal place. fill in the blank 2 %
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). $fill in the blank 3 million
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
