Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Blossom 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 70%

image text in transcribed

Blossom 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 70% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 30% of its sales and provides a 40% contribution margin ratio. The company's fixed costs are $14,352,000 (that is, $71,760 per service outlet). Sales mix is determined based upon total sales dollars. 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 eg. 0.25 and round final answers to decimal places, eg. 2,510.) Sales Dollars Needed Per Product Oil changes $ Brake repair $ eTextbook and Media The company has a desired net income of $47,840 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 eg. 0.25 and round final answers to decimal places, eg. 2,510.) Sales Dollars Needed Per Service Outlet Oil changes $ Brake repair $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting A Critical Approach

Authors: John Friedlan

3rd Edition

0070967601, 978-0070967601

More Books

Students also viewed these Accounting questions