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

Question:

For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions):
Sales ............................................................... $18,602.5
Food and packaging ............................................. $ 6,318.2
Payroll ............................................................. 4,710.3
Occupancy (rent, depreciation, etc.) .......................... 4,195.2
General, selling, and administrative expenses ............... 2,445.2
17,668.9
Income from operations .......................................... $ 933.6
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 ? Round to the nearest tenth of a million (one decimal place).
b. What is McDonald's ratio? Round to one decimal place.
c. How much would income from operations increase if same-store sales increased by $900 million for the coming year, with no change in the ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place).
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...