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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
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 Payroll and employee benefits Occupancy and other expenses $22,000 $(2,600) (2,300) (4,300) General, selling, and administrative expenses (3,800) $(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? million b. What is McDonald's contribution margin ratio? Round to one decimal place. 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 Foxed costs? Round your answer to the nearest tenth of a million (one decimal place). million
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