For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and paper Payroll and employee benefits
For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and paper Payroll and employee benefits Occupancy and other expenses $19,207.8 $(2,564.2) (2,416.4) (4,357.6) General, selling, and administrative expenses (2,545.6) $(11,883.8) Operating income $7,324.0 Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. $ What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). X million b. What is McDonald's contribution margin ratio? Round to one decimal place. 63.1 % c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place). million 504.8
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