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Sedbober [7]
4 years ago
5

For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $25,700 Food a

nd packaging $8,982 Payroll 6,500 Occupancy (rent, depreciation, etc.) 5,748 General, selling, and administrative expenses 3,700 $24,930 Income from operations $770 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
Business
1 answer:
Aleks [24]4 years ago
6 0

Answer:

a. $9,338

b. 0.363

Explanation:

a. Contribution Margin  = Sales - Variable Cost

Where Sales = $25,700

Variable Cost = Food & Packaging + Payroll + 40% x General, Selling and Administrative expenses

V.C. = 8,982 + 6,500 + 40% * 3,700

V.C = 8,982 + 6,500 + 1,480

= $16,362

Therefore, Contribution Margin  = Sales - Variable Cost  

= $25,700 - $16,362

=$9,338

b. McDonald's contribution margin ratio  = Contribution Margin / Sales

= $9,338 / $25,700

= 0.363

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Inventory and property, plant, and equipment are shown as an expense on the income statement and on the balance sheet, respectively.

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A balance sheet is a financial statement that lists an organization's assets, liabilities, and shareholder equity. One of the three important financial statements a company's evaluation will focus on is the balance sheet.

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Why do we subtract depreciation in the calculation of EBIAT if we are going to add it back as the next step of the Free Cash Flo
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3 years ago
Hodgkiss mfg., inc., is currently operating at only 94 percent of fixed asset capacity. current sales are $740,000. how fast can
tangare [24]

Sales grow before any new fixed assets are needed is $156,480.

Fixed assets , additionally known as lengthy-lived assets or property, plant, and equipment, are a time period utilized in accounting for belongings and belongings that cannot without difficulty be converted into cash. fixed properties are one of a kind from modern assets, along with coins or bank accounts, due to the fact the latter is liquid belongings.

currently operating = 94 percent

current sales = $740,000

Full capacity sales = current sales/ Current capacity utilisation

                               = 500000/0.94

                               = $531,914.89

Percentage of fixed assets to full Capacity Sales = Fixed Assets / full Capacity Sales

                                                                                 = 400000/531914.89

                                                                                 = 0.752

Total Fixed assets Needed for New Sales = 74000*0.752

                                                                      = 556480

Additional Fixed Assets needed = 556480 - 400000

                                                      = $156,480   answer.

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2 years ago
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