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McDonalds - Calculate Contribution Margin

Identify a decision that has recently been made or will be made in the near future in your organization. Identify two relevant and two non-relevant costs in this decision. Support your answers using CM calculations.

If you cannot identify specific actual amounts, make a reasonable estimate and apply the tool as if the data were factual.

Your report should include

The name and nature of the organization
The activity and time period you used
The inputs you used
Your results
Any implications from your results

The corporation is McDonalds and the product would be the new mocha and cappuccino.

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Case of McDonald's

McDonald's Corporation is the world's largest chain of fast food restaurants, serving nearly 47 million customers daily. It sells food items, soft drinks, milkshakes, and desserts. It also offers salads, wraps and fruit. (Wikipedia, 2009) Let us take the example of Big Mac sandwich which has turned 40 in 2008 -- a landmark achievement for McDonald's -- still sells over 550 million units every year. It requires the ingredients (raw material), labour (Managers etc.), money (Capital), and enterprise (Shareholders and promoters) to provide the product to the customers.

Hence the composition of inputs for McDonald's is:

Ingredients ...

Solution Summary

This response provides steps to calculate contribution margin of McDonald's, including the activity, inputs, results, and implications in about 335 words.