Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Express Delivery is a rapidly growing delivery service. Last year, 80% of its revenue came from the delivery of mailing pouches and small, standardized delivery

image text in transcribed

Express 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, Express believes that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $13,112,100. (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 Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.22 and round final answers to O decimal places, e.g. 2,510.) Total break-even sales $ 32780250 Sale of mail pouches and small boxes 26224200 AA $ $ Sale of non-standard boxes 6556050 (b) The company's 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 company's 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 O decimal places, e.g. 2,510.) Total break-even sales 26224200 Sale of mail pouches and small boxes AAA 10489680 Sale of non-standardized boxes 3933630

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

Cost Accounting Foundations And Evolutions

Authors: Michael R. Kinney, Jenice Prather-Kinsey, Cecily A. Raiborn

6th Edition

0324235011, 978-0324235012

More Books

Students also viewed these Accounting questions