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 $16,488 $5,552 4,400 Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and admin. expenses 4,025 2,434 Other expense 209 Total expenses (16,620) Operating income (loss) $(132) Assume that the variable costs consist of food and packaging, payroll, and 45% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Enter your answer in million, rounded to one decimal place. $5,440,7 million b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. 33.00 % c. Use the rounded contribution margin ratio value to answer the following question: how much would operating income increase if same- store sales increased by $500 million for the coming year, with no change in the contribution margin ratio or fixed costs? 165 million d. What would have been the operating income or loss for the recent year if sales had been $500 million more? 368 X million d. What would have been the operating income or loss for the recent year if sales had been $500 million more? 368 X million e. Use the rounded contribution margin ratio value to answer the following question: To achieve break even for the recent year, by how much would sales need to increase? 516 x million Feedback Check My Work a. Sales minus variable costs equals contribution margin. b. Contribution margin divided by sales equals contribution margin ratio. c. Multiply the sales increase by the contribution margin percentage. d. Deduct operating loss from the increase in operating income computed in c. e. Divide operating loss by contribution margin ratio to determine the increase in sales required to break even