Question
For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales $38,100 Food and packaging $10,440 Payroll 10,100 Occupancy (rent,
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For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions):
Sales $38,100 Food and packaging $10,440 Payroll 10,100 Occupancy (rent, depreciation, etc.) 11,760 General, selling, and admin. expenses 5,800 Other expense 760 Total expenses (38,860) Operating income (loss) $(760) 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.
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 $2,300 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 $2,300 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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