Express Delivery is a rapidly growing delivery service. Last year, 83% of its revenue came from the delivery of mailing "pouches" and small, standardized delivery boxes (which provides a 13% contribution margin). The other 17% of its revenue came from delivering non-standardized boxes (which provides a 64% contribution margin). With the rapid growth of Internet retail sales, Express believes that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $13,430,000.
(a) What is the company's break-even point in total sales dollars? At the break-even point, how much of the company's sales are provided by each type of service? (Use Weighted-Average contribution margin Ratio rounded to 4 decimal places e.g. 0.2552 and round final answers to 0 decimal places, e.g. 2,510.)
(b) The company's management would like to hold its fixed costs constant, but shift its sales mix so that 64% of its revenue comes from the delivery of non-standardized boxes and the remainder from pouches and small boxes. If this were to occur, what would be the company's break-even sales, and what amount of sales would be provided by each service type? (Use Weighted-Average contribution margin Ratio rounded to 4 decimal places e.g. 0.2552 and round final answers to 0 decimal places, e.g. 2,510.)