Express Delivery is a rapidly growing delivery service. Last year, 82% of its revenue came from the delivery of mailing pouches and small, standardized delivery boxes (which provides a 12% contribution margin). The other 18% of its revenue came from delivering non-standardized boxes (which provides a 64% 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 $12,380,000. (a) What is the companys break-even point in total sales dollars? At the break-even point, how much of the companys sales are provided by each type of service?

Total break-even sales:

Sale of mail pouches and small boxes:

Sale of non-standard boxes:

(b) The companys management would like to hold its fixed costs constant, but shift its sales mix so that 64% 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 companys break-even sales, and what amount of sales would be provided by each service type?

Total break-even sales:

Sale of mail pouches and small boxes:

Sale of non-standardized boxes: