Contribution margin and contribution margin ratio
For a recent year, McDonalds MCD companyowned restaurants had the following sales and expenses in millions:
Line Item Description Amount
Sales $
Food and paper $
Payroll and employee benefits
Occupancy and other expenses
General, selling, and administrative expenses
Total $
Operating income $
Assume that the variable costs consist of food and paper, payroll, of occupancy and other expenses, and of the general, selling, and administrative expenses.
a What is McDonald's contribution margin?
fill in the blank of $
million
b What is McDonald's contribution margin ratio? Round to one decimal place.
fill in the blank of
c How much would operating income increase if samestore sales increased by $ 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
fill in the blank of $
million
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