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For a recent year, McDonalds company-owned restaurants had the following sales and expenses (in millions): Sales $ 18,602.5 Food and packaging $ 6,318.2 Payroll 4,710.3

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

Sales

$ 18,602.5

Food and packaging

$ 6,318.2

Payroll

4,710.3

Occupancy (rent, depreciation, etc.)

4,195.2

General, selling, and administrative

2,445.2

17,668.9

Income from operations

$ 933.6

Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.

Answer the following questions:

  1. What is McDonalds contribution margin? (Round your answer to the nearest tenth of one decimal place.)
  2. What is McDonalds contribution margin ratio? (Round your answer to one decimal place.)
  3. How much would income from operations 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 nearest tenth of a million [one decimal place]).

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