Contribution Margin and Contribution Margin Ratio For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales $28,500 Food and packaging $11,730 Payroll 7,600 Occupancy (rent, depreciation, etc.) 4,770 General, selling, and admin. expenses 4,400 Other expense 570 Total expenses (29,070) Operating income (loss) $(570) 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? Enter your answer in million, rounded to one decimal place. $ million b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. % c. How much would operating income increase if same-store sales increased by $1,700 million for the coming year, with no change in the contribution margin ratio or fixed costs?$ million d. What would have been the operating income or loss for the recent year if sales had been $1,700 million more? $ million e. To achieve break even for the recent year, by how much would sales need to increase? Enter your anwer in million rounded to the nearest whole number. $ million
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Contribution Margin and Contribution Margin Ratio
For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions):
Sales $28,500 Food and packaging $11,730 Payroll 7,600 Occupancy (rent, depreciation, etc.) 4,770 General, selling, and admin. expenses 4,400 Other expense 570 Total expenses (29,070) Operating income (loss) $(570)
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? Enter your answer in million, rounded to one decimal place.
$ millionb. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place.
%c. How much would operating income increase if same-store sales increased by $1,700 million for the coming year, with no change in the contribution margin ratio or fixed costs?
$ milliond. What would have been the operating income or loss for the recent year if sales had been $1,700 million more?
$ millione. To achieve break even for the recent year, by how much would sales need to increase? Enter your anwer in million rounded to the nearest whole number.
$ million
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