Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $37,300 Food and packaging $(13,431) Payroll (9,400) Occupancy (rent, depreciation, etc.) (7,949) General, selling, and administrative expenses (5,400) $(36,180) Operating income $1,120 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 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? Round your answer to the closest million. million

Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $37,300 Food and packaging $(13,431) Payroll (9,400) Occupancy (rent, depreciation, etc.) (7,949) General, selling, and administrative expenses (5,400) $(36,180) Operating income $1,120 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 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? Round your answer to the closest million. million

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Contribution margin and contribution margin ratio For a recent year, McDonalds (MCD) company-owned...

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Contribution margin and contribution margin ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and paper D Payroll and employee benefits Occupancy and other expenses General, selling, and administrative expenses million $19,207.8 $(2,564.2) (2,416.4) (4,357.6) (2,545.6) Operating income Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). $(11,883.8) $7,324.0 b. What is McDonald's contribution margin ratio? Round to one decimal place. % million How much would operating income increase if same-store sales lecreased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Re decimal place).