Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $40,800 Food and packaging $11,004 Payroll 10,300 Occupancy (rent, depreciation, etc.) 12,376 General, selling, and administrative expenses 5,900 $39,580 Income from operations $1,220 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 million. (Give answer in millions of dollars.) $________ million b. What is McDonald's contribution margin ratio? ________% c. How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $_________ million
Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $40,800 Food and packaging $11,004 Payroll 10,300 Occupancy (rent, depreciation, etc.) 12,376 General, selling, and administrative expenses 5,900 $39,580 Income from operations $1,220 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 million. (Give answer in millions of dollars.) $________ million b. What is McDonald's contribution margin ratio? ________% c. How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $_________ 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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Contribution Margin and Contribution Margin Ratio
For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions):
| Sales | $40,800 |
| Food and packaging | $11,004 |
| Payroll | 10,300 |
| Occupancy (rent, |
12,376 |
| General, selling, and administrative expenses | 5,900 |
| $39,580 | |
| Income from operations | $1,220 |
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 million. (Give answer in millions of dollars.)
$________ million
b. What is McDonald's contribution margin ratio?
________%
c. How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
$_________ million
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