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

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For a recent year, McDugal's company-owned restaurants had thefollowing sales and expenses (in millions): Sales $20,200 Food andpackaging $7,702 Payroll 5,400 Occupancy (rent, depreciation, etc.)3,998 General, selling, and admin. expenses 3,100 Other expense 400Total expenses (20,600) Operating income (loss) $(400) Assume thatthe variable costs consist of food and packaging, payroll, and 40%of the general, selling, and administrative expenses. a. What isMcDonald's contribution margin? Enter your answer in million,rounded to one decimal place. $ million b. What is McDonald'scontribution margin ratio? Round your percentage answer to onedecimal place. % c. How much would operating income increase ifsame-store sales increased by $1,200 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 forthe recent year if sales had been $1,200 million more? $ million e.To achieve break even for the recent year, by how much would salesneed to increase? Enter your anwer in million rounded to thenearest whole number. $ million

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3.9 Ratings (378 Votes)

Income statement Particulars Amount in million sales 20200 Less Variable costs food and packaging 7702 payroll 5400 general selling and other 310040 1240 14342 Contribution 5858 Less Fixed costs occupancy 3998 General selling 603100 1860 other expense 400 See Answer

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