or a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): Sales $12,718.9 Food and packaging $ 4,033.5 Payroll 3,528.5 Occupancy (rent, depreciation, etc.) 2,847.6 General, selling, and administrative expenses 2,231.3 12,640.9 Income from operations $ 78.0 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 tenth of a million (one decimal place). $fill in the blank 1 million b. What is McDonald's contribution margin ratio? Round your answer to one decimal place. fill in the blank 2 % c. 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). $fill in the blank 3 million Check My Work
or a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): Sales $12,718.9 Food and packaging $ 4,033.5 Payroll 3,528.5 Occupancy (rent, depreciation, etc.) 2,847.6 General, selling, and administrative expenses 2,231.3 12,640.9 Income from operations $ 78.0 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 tenth of a million (one decimal place). $fill in the blank 1 million b. What is McDonald's contribution margin ratio? Round your answer to one decimal place. fill in the blank 2 % c. 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). $fill in the blank 3 million Check My Work
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions):
Sales $12,718.9
Food and packaging $ 4,033.5
Payroll 3,528.5
Occupancy (rent, depreciation, etc.) 2,847.6
General, selling, and administrative expenses 2,231.3
12,640.9
Income from operations $ 78.0
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 tenth of a million (one decimal place).
$fill in the blank 1
million
b. What is McDonald's contribution margin ratio? Round your answer to one decimal place.
fill in the blank 2
%
c. 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).
$fill in the blank 3
million
Check My Work
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