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In: Accounting

For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales...

For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions):

Sales $25,400
Food and packaging $7,868
Payroll 6,400
Occupancy (rent, depreciation, etc.) 6,672
General, selling, and administrative expenses 3,700
$24,640
Income from operations $760

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 $1,500 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
$ million

Solutions

Expert Solution

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

ekkarill92 answered 3 months ago
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