close solutoin list

Contribution margin and contribution margin ratio For a recent year. McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Assume that the variable costs consist of food and packaging, payroll, and 45% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest million. b.What is McDonald's contribution margin ratio? Round to one decimal place. c. How much would operating income increase if same-store sales increased by $500 million for the coming year, with no change in the contribution margin ratio or fixed costs? d.What would have been the operating income or loss for the recent year if sales had been $500 million more? e.To achieve break even for the recent year, by how much would sales need to increase?

BuyFind

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883
BuyFind

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883

Solutions

Chapter
Section
Chapter 11, Problem 11.10E
Textbook Problem

Contribution margin and contribution margin ratio
For a recent year. McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions):

Chapter 11, Problem 11.10E, Contribution margin and contribution margin ratio For a recent year. McDonald's (MCD) company-owned
Assume that the variable costs consist of food and packaging, payroll, and 45% of the general, selling, and administrative expenses.

a. What is McDonald's contribution margin? Round to the nearest million.
b.What is McDonald's contribution margin ratio? Round to one decimal place.
c. How much would operating income increase if same-store sales increased by $500 million for the coming year, with no change in the contribution margin ratio or fixed costs?
d.What would have been the operating income or loss for the recent year if sales had been $500 million more?
e.To achieve break even for the recent year, by how much would sales need to increase?

Expert Solution

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Solution

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter 11 Solutions

Survey of Accounting (Accounting I)
Show all chapter solutions
Ch. 11 - Which of the following graphs illustrates how...Ch. 11 - Which of the following graphs illustrates how unit...Ch. 11 - Which of the following graphs best illustrates...Ch. 11 - In applying the high-low method of Cost...Ch. 11 - If fixed costs increase, what would be the impact...Ch. 11 - An examination of the accounting records of...Ch. 11 - If the unit cost of direct materials is decreased,...Ch. 11 - If insurance rates are increased, what effect will...Ch. 11 - Both Gouda Company and Cheddar Company had the...Ch. 11 - The reliability of cost-volume-profit (CVP)...Ch. 11 - How does the sales mix affect the calculation of...Ch. 11 - What does operating leverage measure, and how is...Ch. 11 - Classify costs Following is a list of various...Ch. 11 - Identify cost graphs The following cost graphs...Ch. 11 - Identify activity bases For a major university,...Ch. 11 - Identify activity bases From the following list of...Ch. 11 - Identify fixed and variable costs Intuit Inc....Ch. 11 - Relevant range and fixed and variable costs Third...Ch. 11 - High-low method Liberty Inc. has decided to use...Ch. 11 - High-low method for service company Miss River...Ch. 11 - Contribution margin ratio a. Matzinger Company...Ch. 11 - Contribution margin and contribution margin ratio...Ch. 11 - Break-even sales and sales to realize operating...Ch. 11 - Break-even sales Molson-Coors Brewing Company...Ch. 11 - Break-even sales Currently, the unit selling price...Ch. 11 - Break-even analysis The Garden Club of Palm...Ch. 11 - Break-even analysis Media outlets such as ESPN and...Ch. 11 - Cost-volume-profit graph For the coming year....Ch. 11 - Profit-volume graph Using the data for Cabinet...Ch. 11 - Break-even graph Name the following graph, and...Ch. 11 - Break-even graph Name the following graph and...Ch. 11 - Sales mix and break-even sales Northwest...Ch. 11 - Break-even sales and sales mix for a service...Ch. 11 - Operating leverage SunRise Inc. and SunSet Inc....Ch. 11 - Classify costs Peak Apparel Co. manufactures a...Ch. 11 - Break-even sales under present and proposed...Ch. 11 - Break-even sales under present and proposed...Ch. 11 - Break-even sales under present and proposed...Ch. 11 - Break-even sales under present and proposed...Ch. 11 - Break-even sales under present and proposed...Ch. 11 - Break-even sales under present and proposed...Ch. 11 - Break-even sales under present and proposed...Ch. 11 - Break-even sales under present and proposed...Ch. 11 - Break-even sales and cost-volume-profit graph For...Ch. 11 - Break-even sales and cost-volume-profit graph For...Ch. 11 - Break-even sales and cost-volume-profit graph For...Ch. 11 - Break-even sales and cost-volume-profit graph For...Ch. 11 - Break-even sales and cost-volume-profit graph Last...Ch. 11 - Break-even sales and cost-volume-profit graph Last...Ch. 11 - Break-even sales and cost-volume-profit graph Last...Ch. 11 - Break-even sales and cost-volume-profit graph Last...Ch. 11 - Sales mix and break-even sales Data related to the...Ch. 11 - Sales mix and break-even sales Data related to the...Ch. 11 - Sales mix and break-even sales Data related to the...Ch. 11 - Sales mix and break-even sales Data related to the...Ch. 11 - Sales mix and break-even sales Data related to the...Ch. 11 - Contribution margin, break-even sales,...Ch. 11 - Contribution margin, break-even sales,...Ch. 11 - Contribution margin, break-even sales,...Ch. 11 - Contribution margin, break-even sales,...Ch. 11 - Contribution margin, break-even sales,...Ch. 11 - Margin of safety a. If Go-Go Buggies Company, with...Ch. 11 - Break-even and margin of safety relationships At a...Ch. 11 - Margin of safety Use the data from E11-12 and...Ch. 11 - Margin of safety Use the data from E11-12 and...Ch. 11 - Sales mix and margin of safety Use the data from...Ch. 11 - Sales mix and margin of safety Use the data from...Ch. 11 - Sales mix and margin of safety Use the data from...Ch. 11 - Margin of safety Using the data from P11-2,...Ch. 11 - Margin of safety Using the data from Pll-2,...Ch. 11 - Margin of safety Using the data from P11-6....Ch. 11 - Margin of safety Using the data from P11-6....Ch. 11 - Margin of safety Using the data from P11-6....Ch. 11 - Ethics and professional conduct in business Phil...Ch. 11 - Break-even sales, contribution margin "Every...Ch. 11 - Break-even analysis Aquarius Games Inc. has...Ch. 11 - Variable costs and activity bases in decision...Ch. 11 - Variable costs and activity bases in decision...Ch. 11 - Break-even analysis Break-even analysis is one of...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions
Why would a firm ever offer a price on a product that is below its full cost?

Managerial Accounting: The Cornerstone of Business Decision-Making

SECURITY MARKET LINE You plan to invest in the Kish Hedge Fund, which has total capital of 500 million invested...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

When does a country become an exporter of a good? An importer?

Principles of Economics (MindTap Course List)

How does a cost-efficient capital market help reduce the prices of goods and services?

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

How does an employer file an amended Form 940?

PAYROLL ACCT.,2019 ED.(LL)-TEXT