Contribution Margin Ratio

a. Young Company budgets sales of $1,210,000, fixed costs of $92,600, and variable costs of $411,400. What is the contribution margin ratio for Young Company? fill in the blank 1 %

b. If the contribution margin ratio for Martinez Company is 60%, sales were $773,000, and fixed costs were $366,400, what was the operating income? $fill in the blank 2

Contribution Margin and Contribution Margin Ratio

For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions):

Sales	$39,800
Food and packaging	$(16,336)
Payroll	(10,000)
Occupancy (rent, depreciation, etc.)	(6,474)
General, selling, and administrative expenses	(5,800)
	$(38,610)
Operating income	$1,190

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 $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $ million

Break-even analysis for a service company

Sprint Corporation (S) is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 60 million direct subscribers (accounts) that generated revenue of $33,347 million. Costs and expenses for the year were as follows (in millions):

Cost of revenue	$14,958
Selling, general, and administrative expenses	7,994
Depreciation and amortization	8,150

Assume that 30% of the cost of revenue and 70% of the selling, general, and administrative expenses are fixed to the number of direct subscribers (accounts). In part (a) and (b), round all interim calculations and final answers to one decimal place.

a. What is Sprints break-even number of accounts, using the data and assumptions given? million accounts

b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant? $ million per account