For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $24,100 Food and packaging $(10,334) Payroll (6,100) Occupancy (rent, depreciation, etc.) (3,446) General, selling, and administrative expenses (3,500) $(23,380) Operating income $720 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.) 6,266 million b. What is McDonald's contribution margin ratio? 26 % c. How much would operating income increase if same-store sales increased by $1,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $fill in the blank 3 million
For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $24,100 Food and packaging $(10,334) Payroll (6,100) Occupancy (rent, depreciation, etc.) (3,446) General, selling, and administrative expenses (3,500) $(23,380) Operating income $720 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.) 6,266 million b. What is McDonald's contribution margin ratio? 26 % c. How much would operating income increase if same-store sales increased by $1,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $fill in the blank 3 million
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions):
| Sales | $24,100 |
| Food and packaging | $(10,334) |
| Payroll | (6,100) |
| Occupancy (rent, depreciation, etc.) | (3,446) |
| General, selling, and administrative expenses | (3,500) |
| $(23,380) | |
| Operating income | $720 |
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.)
6,266 million
b. What is McDonald's contribution margin ratio?
26 %
c. How much would operating income increase if same-store sales increased by $1,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
$fill in the blank 3 million
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