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


For a recent year, McDugals company-owned restaurants had the following sales and expenses (in millions): Sales $14,400 Food


Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative ex
For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales $14,400 Food and packaging $3,960 Payroll 3,800 Occupancy (rent, depreciation, etc.) General, selling, and admin, expenses 4,440 2,200 Other expense 290 Total expenses Operating income (loss) (14,690) $(290) 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. $ x 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 $900 million for the coming year, with no change in the contribution margin ratio or fixed costs?
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. $ 5,760 million b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. L 40) ▼ % C. How much would operating income increase if same-store sales increased by $900 million for the coming year, with no change in the contribution margin ratio or fixed costs? $ 352 X million d. What would have been the operating income or loss for the recent year if sales had been $900 million more? s 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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Total Variable Fixed
Sales 14400
Food and packaging 3960 3960
Payroll 3800 3800
Occupancy (rent, depreciation, etc.) 4440 4440
General, selling and admin expenses 2200 880 1320
Other expenses 290 290
Total expenses 8640 6050
Ans a) Contribution margin
i Sales     14,400.0
ii Variable cost       8,640.0
iii=i-ii Contribution margin       5,760.0
Ans b) Contribution margin ratio
i Contribution margin       5,760.0
ii Sales     14,400.0
iii Contribution margin ratio 40.0%
Ans c)
Change in operating income
i Incremental revenue 900
ii contribution margin % 40.0%
iii=i*ii Incremental operating income = 360
Ans d)
Operating income = 360-290 70
Ans e)
Break even
i Fixed cost 6050
ii Contribution margin % 40.0%
iii=i/ii Break even $ = 15125
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