Question
Blossom Delivery is a rapidly growing delivery service. Last year, 80% of its revenue came from the delivery of mailing pouches and small, standardized delivery
Blossom Delivery is a rapidly growing delivery service. Last year, 80% of its revenue came from the delivery of mailing pouches and small, standardized delivery boxes (which provides a 20% contribution margin). The other 20% of its revenue came from delivering non-standardized boxes (which provides a 70% contribution margin). With the rapid growth of Internet retail sales, Blossom believes that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $ 12,252,000. Sales mix is determined based upon total sales dollars. (a) What is the companys break-even point in total sales dollars? At the break-even point, how much of the companys sales are provided by each type of service? (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.22 and round final answers to 0 decimal places, e.g. 2,510.)
Total break-even sales | $ enter a dollar amount | |
---|---|---|
Sale of mail pouches and small boxes | $ enter a dollar amount | |
Sale of non-standard boxes | $ enter a dollar amount |
(b) The companys management would like to hold its fixed costs constant but shift its sales mix so that 60% 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 companys break-even sales, and what amount of sales would be provided by each service type? (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.22 and round final answers to 0 decimal places, e.g. 2,510.)
Total break-even sales | $ enter a dollar amount | |
---|---|---|
Sale of mail pouches and small boxes | $ enter a dollar amount | |
Sale of non-standardized boxes | $ enter a dollar amount |
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