Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 19-07 PDQ Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair. Oil change-related services

image text in transcribed

Exercise 19-07 PDQ 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 15%. Brake repair represents 20% of its sales and provides a 35% contribution margin ratio. The company's fixed costs are $15,792,800 (that is, $78,964 per service outlet). 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 o decimal places, e.g. 2,510.) Oil changes $ Brake repair LINK TO TEXT LINK TO VIDEO The company has a desired net income of $54,986 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.g. 2,510.) Oil changes s Brake repairs Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT LINK TO VIDEO

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

Auditing and Assurance Services

Authors: Timothy Louwers, Allen Blay, David Sinason, Jerry Strawser, Jay Thibodeau

7th edition

978-1259573286, 1259573281, 978-1260152166

More Books

Students also viewed these Accounting questions