Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Contribution Margin and Contribution Margin Ratio For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $15,400 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 $15,400 Food and packaging $(3,844) Payroll (3,900) Occupancy (rent, depreciation, etc.) (4,996) General, selling, and administrative expenses (2,200) $(14,940) Operating income $460 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 $900 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey Of Accounting

Authors: Carl S. Warren, Amanda Farmer

9th Edition

0357132599, 978-0357132593

More Books

Students also viewed these Accounting questions

Question

2. What are the main types of interactive ads?

Answered: 1 week ago

Question

LO2 Describe the various purposes of performance appraisals.

Answered: 1 week ago