Question
For a recent year, McDonalds had the following sales and expenses (in millions): Sales..................................$15,352 Food and packaging.................$5,204 Payroll.................................$4,040 Occupancy (rent, depreciation, etc)..1,022 General, selling, and
For a recent year, McDonalds had the following sales and expenses (in millions): Sales..................................$15,352 Food and packaging.................$5,204 Payroll.................................$4,040 Occupancy (rent, depreciation, etc)..1,022 General, selling, and administrative expenses....2,220 Total....................................................$12,486 Income from operations..............................$ 2,866 Assume that the selling variable cost 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. b. What is McDonald's contribution margin ratio> Round to two decimal places. c. How much would income from operations increase if same store sales increased by $450 million for the coming year, with no change in the contribution margin ratio or fixed costs?
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