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Contribution Margin and Contribution Margin Ratio For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales $24,000 Food and
Contribution Margin and Contribution Margin Ratio For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales $24,000 Food and packaging $10,120 Payroll 6,400 3,780 Occupancy (rent, depreciation, etc.) General, selling, and admin. expenses 3,700 Other expense 480 Total expenses (24,480) Operating income (loss) $(480) 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? Enter your answer in million, rounded to one decimal place. $ 6,000 million b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. 25 % c. How much would operating income increase if same-store sales increased by $1,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? $ 350 million d. What would have been the operating income or loss for the recent year if sales had been $1,400 million more? Occupancy (rent, depreciation, etc.) General, selling, and admin. expenses 3,780 3,700 480 Other expense Total expenses (24,480) Operating income (loss) $(480) 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? Enter your answer in million, rounded to one decimal place. $ 6,000 million b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. 25 % c. How much would operating income increase if same-store sales increased by $1,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? $ 350 million d. What would have been the operating income or loss for the recent year if sales had been $1,400 million more? $ 130 X million e. To achieve break even for the recent year, by how much would sales need to increase? Enter your anwer in million rounded to the nearest whole number. $ 25,920 x million Feedback Check My Work
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