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Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $14,900 Food and

Contribution Margin and Contribution Margin Ratio

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

Sales $14,900
Food and packaging $3,962
Payroll 3,800
Occupancy (rent, depreciation, etc.) 4,488
General, selling, and administrative expenses 2,200
$14,450
Income from operations $450

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.) $ ______ million

b. What is McDonald's contribution margin ratio? _______%

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 closest million. $______ million

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