Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $31,100 Food and packaging $11,548 Payroll 7,800 6,322 Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses 4,500 $30,170 Income from operations $930 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 million. (Give answer in millions of dollars.) $ x million b. What is McDonald's contribution margin ratio? 32 % C. How much would income from operations increase if same-store sales increased by $1,900 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. 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. Learning Objective 2