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McDonald's Corporation sells meals with a selling price of $10 per unit. Fixed costs amount to $1 billion, and variable costs are $6 per unit.
McDonald's Corporation sells meals with a selling price of $10 per unit. Fixed costs amount to $1 billion, and variable costs are $6 per unit.
Required:
- Calculate the break-even point in units and sales dollars.
- Determine the margin of safety in units and percentage.
- Analyze the impact of a 10% increase in fixed costs on the breakeven point.
- Calculate the contribution margin ratio.
- Determine the sales units required to achieve a target profit of $500 million.
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