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Contribution Margin and Contribution Margin Ratio For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales $15,500 Food and

Contribution Margin and Contribution Margin Ratio

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

Sales $15,500
Food and packaging $5,480
Payroll 4,100
Occupancy (rent, depreciation, etc.) 3,520
General, selling, and admin. expenses 2,400
Other expense 310
Total expenses (15,810)
Operating income (loss) $(310)

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? Enter your answer in million, rounded to one decimal place. $ million

b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. %

c. How much would operating income increase if same-store sales increased by $900 million for the coming year, with no change in the contribution margin ratio or fixed costs? $ million

d. What would have been the operating income or loss for the recent year if sales had been $900 million more? $ million

e. To achieve break even for the recent year, by how much would sales need to increase? Enter your anwer in million rounded to the nearest whole number. $ million

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