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

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Accounting

Contribution Margin and Contribution Margin Ratio

For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions):

Sales $25,500
Food and packaging $9,205
Payroll 6,400
Occupancy (rent, depreciation, etc.) 5,435
General, selling, and administrative expenses 3,700
$24,740
Income from operations $760

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.) $fill in the blank 1 million

b. What is McDonald's contribution margin ratio? fill in the blank 2 %

c. How much would income from operations increase if same-store sales increased by $1,500 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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