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Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's company-owned restaurants had the following...

Contribution Margin and Contribution Margin Ratio For a recent year, McDonalds company-owned restaurants had the following s

b. What is McDonalds contribution margin ratio? Round to one decimal place. % C. How much would income from operations incre

Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses $18,169.3 $ 6,129.7 4,756.0 4,402.6 2,48179 17,776.2 $ 393.1 Income from operations 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). million b. What is McDonald's contribution margin ratio? Round to one decimal place. 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) op ^ 9:13 AM 49 28/2020
b. What is McDonald's contribution margin ratio? Round to one decimal place. % 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). million
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Answer A. Mcdonald contribution is $ 6288 million (As per Sheet enclosed in last)

Answer B. Mcdonald contribution margin is 34.61% (As per Sheet enclosed in last)

Answer C. If same store sales increased by $ 500 million in coming year than the Income from operation will increase by $173.05 million.

WORKING SHEET

Mcdonald Ratio's
IN MILLIONS IF SALES INCREASED BY 500 M
SALES 18169.30 18669.30
TOTAL A 18169.30 18669.30
LESS VARIABLE COST:
FOOD & PACKAGING 6129.70
PAYROLL 4756.00
GEN.,SELLING, & ADM EXP
(40%) OF 2487.90 995.16
TOTAL B 11880.86
CONTRIBUTION A-B 6288.44 6461.4913
CONTRIBUTION IN % 34.61024916 34.610249
FIXED EXPENSES
OCCUPANCY (RENT & DEP.) 4402.60
GEN. SELLING & ADM EXP. 60% 1492.74
(TOTAL EXP ARE 2487.90 MILLION)
TOTAL C 5895.34 5895.34
NET PROFIT 393.10 566.15
increasae in profits will be 173.05
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