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 $20,000 $(2,800) (2,200) (4,400) General, selling, and administrative expenses (2,600) $(12,000) $8,000 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? 18,360 X million b. What is McDonald's contribution margin ratio? Round to one decimal place. 13,960 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). million Break-even sales and cost-volume-profit chart For the coming year, Cleves Company anticipates a unit selling price of $60, a unit variable cost of $30, and fixed costs of $213,000. Required: 1. Compute the anticipated break-even sales (units). 7,100 units 2. Compute the sales (units) required to realize a target profit of $81,000. 9,800 units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 14,200 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $594,000 $534,000 $426,000 $318,000 $258,000 Profit Profit Break-even Loss Loss 4. Determine the probable operating income (loss) if sales total 11,400 units. If required, use the minus sign to indicate a loss. 11,400,0 X Income Correct