For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions):
Sales by company operated restaurants $12,719 Food and paper $4,034 Payroll and employee benefits 3,529 Occupancy and other expenses 2,848 Selling, general, and administrative expenses 2,231 Other operating income (1,163) Net operating expenses (11,479)
Operating income (loss) $1,240
Assume that the variable costs consist of food and paper, payroll and employee benefits, and 35% of the selling, general, and administrative expenses.
a. What is McDonald's contribution margin? Enter your answer in million, rounded to the nearest million.