Question
For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales$21,300Food and packaging$7,844Payroll5,400Occupancy (rent, depreciation, etc.)4,316General, selling, and administrative expenses3,100$20,660Income
For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions):
Sales$21,300Food and packaging$7,844Payroll5,400Occupancy (rent, depreciation, etc.)4,316General, selling, and administrative expenses3,100$20,660Income from operations$640
Assume that thevariable costsconsist 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 income from operations increase if same-store sales increased by $1,300 million for the coming year, with no change in the contribution margin ratio orfixed costs? Round your answer to the closest million.
$million
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