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Pharoah Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service oil changes and brake repair. Oil change-related services represent 80% of its sales and provide a contribution margin ratio of 25%. Brake repair represents 20% of its sales and provides a 35% contribution margin ratio. The company's fixed costs are $15,660,000 (that is, $78,300 per service outlet), Sales mix is determined based upon total sales dollars. (a) Your answer is correct Calculate the dollar amount of each type of service that the company must provide in order to break even. (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to 0 decimal places, e.g. 2.510.) Sales Dollars Needed Per Product Oil changes $ 46400000 Brake repair 11600000 e Textbook and Media Attempts: 4 of 5 used (b) * Your answer is incorrect. The company has a desired net income of $50,004 per service outlet. What is the dollar amount of each type of service that must be performed by each service outlet to meet its target net income per outlet? (Use Weighted- Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to o decimal places, e.3. 2,510.) apart Sales Dollars Needed Per Service Outlet Oil changes 46548160 $ Brake repair $ 11637040 Ivanhoe Company manufactures and sells three products. Relevant per unit data concerning each product are given below. Product A B $9 $14 $18 Selling price Variable costs and expenses Machine hours to produce $6 $12 $15 2 1 2 (a) Your answer is correct. Compute the contribution margin per unit of limited resource (machine hours) for each product. (Round contribution margin per unit to 2 decimal places, e.g. 1.50.) Product A Product B Contribution margin per unit of limited resource $ 15 e Textbook and Media Attempts: 1 of 5 used (b) Your answer is correct. Assuming 3,000 additional machine hours are available, which product should be manufactured Product B : eTextbook and Media Attempts: 1 of 5 used What is the total contribution margin of the additional hours are il vided equally among the products and 12 they are located entirely to the product dentified above Total contribution margin (1) Divided equally among the products $ 2. Allocated entirely to the product identified above 5 Carla Vista Modernas of Juarez. Mexko is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled draftsmen Rafael Jiminez Carla Vista's owner, is considering replacing the draftsmen with a computerized drafting system. However, before making the change Rafael would like to know the consequences of the change, since the volume of business varies significantly from year to year. Shown below are CVP Income statements for each alternative Manual System $1.620.000 Computerized System $1.620.000 Sales Variable costs 1.296.000 648.000 Contribution margin 324.000 972.000 Fixed costs 84000 732.000 Net Income $240.000 $240.000 Your answer correct Determine the degree of operating leverage for each alternative. (Round answers to 2 decimat places, es 1.250 Depree of Operating Leverage 1:35 Manual System Computerized System 20 Calculate the increase in Net Income for each alternative Ir sales increased by $110,000 due to an increase in the number of units sold. Increase in Net Income Manual System $ 9070.000 Computerized System $ 4 103 333 33 Which alternative would produce the higher net income? Computerized System
