Answered step by step
Verified Expert Solution
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
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 $12,987,000.
xpress 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 prov des a 20% contribution m he other 20% of its revenue came from delivering non-standardized boxes which provides a 70% contribution pportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $12,987,000 ma with the net re ss believes that there ar at (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 4 decimal places e.g. 0.2552 and round final answers to O decimal places, e.g. 2,510.) Total break-even sales Sale of mail pouches and small boxes Sale of non-standard boxes b The company's management would like to hold its fixed costs constant but shift its sales max so that 60% of its revenue comes rom e deiery 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 4 decimal places e.g. 0.2552 and round final answers to O decimal places, e.g. 2,51O.) Total break-even sales Sale of mail pouches and small boxes Sale of non-standardized boxesStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started