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Cullumber Delivery is a rapidly growing delivery service. Last year, 80% of its revenue came from the delivery of mailing pouches and small, standardized delivery
Cullumber 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...
Cullumber 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 bowes (which provides a 70\% contribution margin). With the rapid growth of Internet retail sales, Cullumber believes that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $13,824,900. Sales mix is determined based upon total sales dollars. (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 Welghted-Average Contribution Margin Rotio rounded to 2 decimal places es. 0.22 and round final answers to 0 decimal ploces, eg. 2,510. (b) The company's management would tike to hold its fixed costs constant but shift its sales mix so that 60 of 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 Fatio rounded to 2 decimal ploces es. 0.22 and round final answers to 0 decinal places, es. 2,510) Total break-even sales Sale of mail pouches and small bowes Sole of nom-standardized bowes Step by Step Solution
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