Question
For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $29,900 Food and packaging $(10,474) Payroll (7,500) Occupancy
For a recent year, McDonalds (MCD) company-owned restaurants had the following sales and expenses (in millions):
Sales | $29,900 |
Food and packaging | $(10,474) |
Payroll | (7,500) |
Occupancy (rent, depreciation, etc.) | (6,626) |
General, selling, and administrative expenses | (4,400) |
$(29,000) | |
Operating income | $900 |
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.) $fill in the blank million
b. What is McDonald's contribution margin ratio? fill in the blank %
c. How much would operating income increase if same-store sales increased by $1,800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $fill in the blank 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