Question
For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $26,600 Food and packaging $(11,424) Payroll (6,700) Occupancy
For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions):
Sales | $26,600 |
Food and packaging | $(11,424) |
Payroll | (6,700) |
Occupancy (rent, depreciation, etc.) | (3,776) |
General, selling, and administrative expenses | (3,900) |
$(25,800) | |
Operating income | $800 |
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.) $
b. What is McDonald's contribution margin ratio?
c. How much would operating income increase if same-store sales increased by $1,600 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $
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