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Assume that the variable costs consist of food and packaging; payroll; and 40% of the general, selling, and administrative expenses. 1. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). 2. What is McDonald's contribution margin ratio? Round to one decimal place. Answer Check Figure: 34.6% 3. How much would income from operations increase if same- store sales increased by $500 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).

Assume that the variable costs consist of food and packaging; payroll; and 40% of the general, selling, and administrative expenses. 1. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). 2. What is McDonald's contribution margin ratio? Round to one decimal place. Answer Check Figure: 34.6% 3. How much would income from operations increase if same- store sales increased by $500 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).

Financial & Managerial Accounting
Financial & Managerial Accounting
14th Edition
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter20: Variable Costing For Management Analysis
Section: Chapter Questions
Problem 20.4BPR: Salespersons' report and analysis Pachec Inc. employs seven salespersons to sell and distribute its...
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EX 21-10 Contribution margin and contribution margin ratio 1. Obj. 2 For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): Sales $18,169.3 $ 6,129.7 Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses 4,756.0 4,402.6 2,487.9 $17,776.2 $ 393.1 Income from operations Assume that the variable costs consist of food and packaging; payroll; and 40% of the general, selling, and administrative expenses. 1. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). 2. What is McDonald's contribution margin ratio? Round to one decimal place. Answer Check Figure: 34.6% 3. How much would income from operations increase if same- store sales increased by $500 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).
Transcribed Image Text:EX 21-10 Contribution margin and contribution margin ratio 1. Obj. 2 For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): Sales $18,169.3 $ 6,129.7 Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses 4,756.0 4,402.6 2,487.9 $17,776.2 $ 393.1 Income from operations Assume that the variable costs consist of food and packaging; payroll; and 40% of the general, selling, and administrative expenses. 1. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). 2. What is McDonald's contribution margin ratio? Round to one decimal place. Answer Check Figure: 34.6% 3. How much would income from operations increase if same- store sales increased by $500 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).
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