Question
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 1 million
b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. fill in the blank 2 %
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 3 million
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 4 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. $fill in the blank 5 million
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