Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

High-Low Method Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the

image text in transcribedimage text in transcribed

High-Low Method Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: Total Costs Units Produced $393,120 2,730 4,120 512,370 6,630 611,520 a. Determine the variable cost per unit and the total fixed cost. Variable cost: (Round to the nearest dollar.) per unit Total fixed cost: b. Based on part (a), estimate the total cost for 3,370 units of production Total cost for 3,370 units: Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions) Sales $41,600 Food and packaging $14,932 Payroll 10,500 Occupancy (rent, depreciation, etc.) 8,818 General, selling, and administrative expenses 6,100 $40,350 Income from operations $1,250 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? Round to the nearest million. (Give answer in millions of dollars.) million b. What is McDonald's contribution margin ratio? c. How much would income from operations increase if same-store sales increased by $2,500 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. million

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

Modern Auditing

Authors: Graham W. Cosserat, Neil Rodda

3rd Edition

0470319739, 9780470319734

More Books

Students also viewed these Accounting questions