For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions): Line Item Description Amount Sales $21,000 Food and paper $(2,700) Payroll and employee benefits (2,200) Occupancy and other expenses (4,300) General, selling, and administrative expenses (4,800) Total $(14,000) Operating income $7,000 Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin?fill in the blank 1 of 1$ million b. What is McDonald's contribution margin ratio? Round to one decimal place.fill in the blank 1 of 1 % c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place).fill in the blank 1 of 1$ million

For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions): Line Item Description Amount Sales $21,000 Food and paper $(2,700) Payroll and employee benefits (2,200) Occupancy and other expenses (4,300) General, selling, and administrative expenses (4,800) Total $(14,000) Operating income $7,000 Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin?fill in the blank 1 of 1$ million b. What is McDonald's contribution margin ratio? Round to one decimal place.fill in the blank 1 of 1 % c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place).fill in the blank 1 of 1$ million

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Contribution margin and contribution margin ratio For a recent year, McDonalds (MCD) company-owned...

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Line Item Description	Amount
Sales	$21,000
Food and paper	$(2,700)
Payroll and employee benefits	(2,200)
Occupancy and other expenses	(4,300)
General, selling, and administrative expenses	(4,800)
Total	$(14,000)
Operating income	$7,000

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For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $24,100 Food and packaging $(10,334) Payroll (6,100) Occupancy (rent, depreciation, etc.) (3,446) General, selling, and administrative expenses (3,500) $(23,380) Operating income $720 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.)6,266 million b. What is McDonald's contribution margin ratio?26 % c. How much would operating income increase if same-store sales increased by $1,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.$fill in the blank 3 million
For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $28,400 Food and packaging $(10,472) Payroll (7,200) Occupancy (rent, depreciation, etc.) (5,778) General, selling, and administrative expenses (4,100) $(27,550) Operating income $850 Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.
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For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and paper Payroll and employee benefits Occupancy and other expenses $21,000 $(2,600) (2,000) (4,200) General, selling, and administrative expenses (3,200) $(12,000) $9,000 Operating income Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? X million b. What is McDonald's contribution margin ratio? Round to one decimal place. x % c. How much would operating income increase if same-store sales increased by $1,000 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). X million
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For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $19,200 Food and packaging $6,368 Payroll 4,800 Occupancy (rent, depreciation, etc.) 4,652 General, selling, and administrative expenses 2,800 $18,620 Income from operations $580 Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a. What is Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)$fill in the blank 1 million b. What is Wicker Company's contribution margin ratio? Round to one decimal place.fill in the blank 2 % c. How much would income from operations increase if same-store sales increased by $1,200 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.$fill in the blank 3 million
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Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) 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 $18,700 $(7,497) (4,700) (3,243) (2,700) $(18,140) Operating income 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.) million b. What is McDonald's contribution margin ratio? % $560 c. How much would operating income increase if same-store sales increased by $1,100 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. million
For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $41,500 Food and packaging $11,585 Payroll 10,500 Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses 12,175 6,000 $40,260 $1,240 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 Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.) $ 24,485 x million b. What is Wicker Company's contribution margin ratio? Round your answer to one decimal place. 59 X % c. How much would income from operations increase if same-store sales increased by $2,500 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. 1,475 X million.
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