FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question

What is contribution margin?

learning resour...
Cengage Learning
еBook
Show Me How
Print Item
Contribution Margin and Contribution Margin Ratio
For a recent year, McDonald's (MCD) company-owned réstaurants had the following sales and expenses (in millions):
Sales
$15,295.0
Food and packaging
$(4,896.9)
Payroll
(4,134.2)
Occupancy (rent, depreciation, etc.)
(3,667.7)
General, selling, and administrative expenses
(2,384.5)
$(15,083.3)
Operating income
$211.7
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 tenth of a million (one decimal place).
million
b. What is McDonald's contribution margin ratio? Round to one decimal place.
C. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change
in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place).
million
Previous
Next
Check My Work 4 more Check My Work uses remaining.
All work saved
%24
%24
expand button
Transcribed Image Text:learning resour... Cengage Learning еBook Show Me How Print Item Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned réstaurants had the following sales and expenses (in millions): Sales $15,295.0 Food and packaging $(4,896.9) Payroll (4,134.2) Occupancy (rent, depreciation, etc.) (3,667.7) General, selling, and administrative expenses (2,384.5) $(15,083.3) Operating income $211.7 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 tenth of a million (one decimal place). million b. What is McDonald's contribution margin ratio? Round to one decimal place. C. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place). million Previous Next Check My Work 4 more Check My Work uses remaining. All work saved %24 %24
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education