Question
For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $25,400 Food and packaging $7,868 Payroll 6,400 Occupancy (rent,
For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions):
Sales | $25,400 |
Food and packaging | $7,868 |
Payroll | 6,400 |
Occupancy (rent, depreciation, etc.) | 6,672 |
General, selling, and administrative expenses | 3,700 |
$24,640 | |
Income from operations | $760 |
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 income from operations increase if same-store sales increased by $1,500 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $ million
Step 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