Question
or a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $16,100 Food and packaging $6,894 Payroll 4,100 Occupancy (rent,
or a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $16,100 Food and packaging $6,894 Payroll 4,100 Occupancy (rent, depreciation, etc.) 2,326 General, selling, and administrative expenses 2,300 $15,620 Income from operations $480 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 $1,000 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $ million
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