Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had...
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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 $15,295.0 Food and packaging $(4,896.9) Payroll (4,134.2) (3,667.7) Occupancy (rent, depreciation, etc.) 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). $ 9,984.9 x million b. What is McDonald's contribution margin ratio? Round to one decimal place. 65.3 X % 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). 522.4 X million Feedback
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