Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales $39,400 Food and packaging $13,992 Payroll 10,400 Occupancy (rent,

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

Sales $39,400
Food and packaging $13,992
Payroll 10,400
Occupancy (rent, depreciation, etc.) 9,008
General, selling, and admin. expenses 6,000
Other expense 790
Total expenses (40,190)
Operating income (loss) $(790)

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? Enter your answer in million, rounded to one decimal place. $fill in the blank

b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. fill in the blank

c. How much would operating income increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? $fill in the blank

d. What would have been the operating income or loss for the recent year if sales had been $2,400 million more? $fill in the blank

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. $fill in the blank

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

Financial And Managerial Accounting For School Administrators Tools For School

Authors: Ronald E. Everett, Donald R. Johnson, Bernard W. Madden

1st Edition

1578865816, 978-1578865819

More Books

Students also viewed these Accounting questions

Question

Only one condition can be tested in an If statement. True False

Answered: 1 week ago