Question
For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales $36,000 Food and packaging $8,820 Payroll 9,500 Occupancy (rent,
For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions):
Sales $36,000
Food and packaging $8,820
Payroll 9,500
Occupancy (rent, depreciation, etc.) 12,180
General, selling, and admin. expenses 5,500
Other expense 720
Total expenses (36,720)
Operating income (loss) $(720)
a. What is McDonald's contribution margin? Enter your answer in million, rounded to one decimal place.
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 $2,200 million for the coming year, with no change in the contribution margin ratio or fixed costs?
d. What would have been the operating income or loss for the recent year if sales had been $2,200 million more?
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.
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