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 Payroll and employee benefits Occupancy and other expenses $23,000 $(2,800) (2,000) (4,200) General, selling, and administrative expenses (4,000) $(13,000) Operating income $10,000 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? 17,550 X million b. What is McDonald's contribution margin ratio? Round to one decimal place. 76.3 X % c. How much would operating income increase if same-store sales increased by $900 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). 686.7 X 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 Food and paper Payroll and employee benefits Occupancy and other expenses $23,000 $(2,800) (2,000) (4,200) General, selling, and administrative expenses (4,000) $(13,000) Operating income $10,000 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? 17,550 X million b. What is McDonald's contribution margin ratio? Round to one decimal place. 76.3 X % c. How much would operating income increase if same-store sales increased by $900 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). 686.7 X 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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