Contribution margin and contribution margin ratio For a recent year, McDonald's (MCD) company-owned restaurants had the...
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Contribution margin and contribution margin ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and paper $20,000 $(2,800) Payroll and employee benefits (2,100) Occupancy and other expenses (4,300) General, selling, and administrative expenses (3,800) $(13,000) Operating income $7,000 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? X million b. What is McDonald's contribution margin ratio? Round to one decimal place. X % C. How much would operating income increase if same-store sales increased by $800 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). X million Contribution margin and contribution margin ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and paper $20,000 $(2,800) Payroll and employee benefits (2,100) Occupancy and other expenses (4,300) General, selling, and administrative expenses (3,800) $(13,000) Operating income $7,000 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? X million b. What is McDonald's contribution margin ratio? Round to one decimal place. X % C. How much would operating income increase if same-store sales increased by $800 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). X million
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