Question
Contribution margin and contribution margin ratio For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions): Line Item Description
Contribution margin and contribution margin ratio For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions): Line Item Description Amount Sales $22,000 Food and paper $(2,700) Payroll and employee benefits (2,400) Occupancy and other expenses (4,100) General, selling, and administrative expenses (3,800) Total $(13,000) Operating income $9,000 Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? fill in the blank 1 of 1$ 14,355 million b. What is McDonald's contribution margin ratio? Round to one decimal place. fill in the blank 1 of 1 65.3 % c. How much would operating income increase if same-store sales increased by $1,000 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place). fill in the blank 1 of 1$ 65,300 million
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