For a recent year, McDonalds company-owned restaurants had the following sales and expenses (in millions): Assume that

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

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).

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 $500 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).

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Accounting

ISBN: 9781337902687

28th Edition

Authors: Carl S. Warren, Christine Jonick, Jennifer Schneider

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