How much would income from operations increase ifsame-store

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Reference no: EM13614907

For a recent year, McDonald's had the following sales andexpenses (in millions):

Sales 15,352

Food andpackaging 5,204

Payroll 4,040

Occupancy (rent, depreciation,etc) 1,022

General, selling, and administrativeexpenses 2,220

12,486

Income fromoperations 2,866

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

What is McDonald's contributionmargin? Round to the nearest million.
What is McDonald's contribution marginratio? Round to two decimal places.
How much would income from operations increase ifsame-store sales increased by $450 million for the coming year,with no change in the contribution margin ratio or fixedcosts?

Reference no: EM13614907

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