Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 $15,800 Food

image text in transcribed
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 $15,800 Food and packaging $(5,508) Payroll (4,000) Occupancy (rent, depreciation, etc.) (3,522) General, selling, and administrative expenses (2,300) $(15,330) Operating Income $470 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 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 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_2

Step: 3

blur-text-image_3

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

Governmental Accounting

Authors: Steven M. Bragg

2022nd Edition

1642210781, 978-1642210781

More Books

Students also viewed these Accounting questions

Question

How do emotions affect peoples relationship with money?

Answered: 1 week ago