Question
Contribution Margin and Contribution Margin Ratio For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $14,100 Food
Contribution Margin and Contribution Margin Ratio
For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions):
Sales | $14,100 |
Food and packaging | $(6,135) |
Payroll | (3,600) |
Occupancy (rent, depreciation, etc.) | (1,845) |
General, selling, and administrative expenses | (2,100) |
$(13,680) | |
Operating income | $420 |
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 million. (Give answer in millions of dollars.) $fill in the blank 1 million
b. What is McDonald's contribution margin ratio? fill in the blank 2 = %
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 closest million. $fill in the blank 3 million
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