Answered step by step
Verified Expert Solution
Question
1 Approved Answer
For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): The system counted a, b & c as wrong (I
For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions):
The system counted a, b & c as wrong (I even tried rounding one decimal point and it was still counted as wrong)...... I need to know where I'm going wrong.
Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses $18,169.3 $ 6,129.7 4,756.0 4,402.6 2,487.9 17,776.2 $ 393.1 Income from operations 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 tenth of a million (one decimal place) 393.1 X million b. What is McDonald's contribution margin ratio? Round to one decimal place 35| X % c. How much would income from operations increase if same-store sales increased by $500 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place) 564.30X million Feedback Check My Work a. Sales minus total variable costs equals contribution margin b. Contribution margin divided by sales equals contribution margin ratio c. Multiply the sales increase by the contribution margin percentageStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started