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What is mcdonald contribution margin ratio
Course:- Accounting Basics
Reference No.:- EM132082214




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

Sales

$ 18,602.5

Food and packaging

$ 6,318.2

Payroll

4,710.3

Occupancy (rent, depreciation, etc.)

4,195.2

General, selling, and administrative

2,445.2

17,668.9


Income from operations

$ 933.6

Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.

Answer the following questions:

1. What is McDonald's contribution margin?

2. What is McDonald's contribution margin ratio?

3. How much would income from operations increase if same-store sales increased by $900 million for the coming year, with no change in the contribution margin ratio or fixed costs?




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