Contribution margin and contribution margin ratio OBJ. 2 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 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

$900 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).