3. EX.20.10.ALCO (Algorithmic) Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD)...
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3. EX.20.10.ALCO (Algorithmic) 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 $18,700 Food and packaging Payroll $16,001) (4,700) (4,739) Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses (2,700) 5/18,140) Operating income $560 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 sarnic-store sales increased by $1,100 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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