Question
Bramble Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change-related services represent
Bramble Service has over 200 auto-maintenance service outlets nationwide. It provides 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 15%. Brake repair represents 20% of its sales and provides a 65% contribution margin ratio. The company's fixed costs are $ 12,720,000 (or $ 96,000 per service outlet).
(a)
Calculate the dollar amount of each type of service that the company must provide in order to break even.
Oil changes | $ enter a dollar amount | |
---|---|---|
Brake repair | $ enter a dollar amount |
(B)
- The company has a desired net income of $50,000 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?
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