Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $22,100 Food and packaging $8,590 Payroll 5,600 Occupancy

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

Sales $22,100
Food and packaging $8,590
Payroll 5,600
Occupancy (rent, depreciation, etc.) 3,610
General, selling, and admin. expenses 3,200
Other expense 440
Total expenses (21,440)
Operating income (loss) $660

Assume that the Costs that vary in total dollar amount as the level of activity changes.variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.

a. What is McDonald's contribution margin? Enter your answer in million, rounded to one decimal place. $ million

b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. %

c. How much would operating income increase if same-store sales increased by $1,300 million for the coming year, with no change in the contribution margin ratio or Costs that tend to remain the same in amount, regardless of variations in the level of activity.fixed costs? $ million

d. What would have been the operating income or loss for the recent year if sales had been $1,300 million more? $ million

e. To achieve break even for the recent year, by how much would sales need to increase? Enter your anwer in million rounded to the nearest whole number. $ million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foundations Of Cost Control

Authors: Daniel Traster

1st Edition

0132156555, 978-0132156554

More Books

Students also viewed these Accounting questions

Question

=+3. What is content curation and its role within social media?

Answered: 1 week ago