GoGo Juice is a combination gas station and convenience store located at a busy intersection. Recently, a national chain opened a similar store only a block away; consequently, sales have decreased for GoGo. In an effort to reclaim lost sales, GoGo has implemented a promotional effort; for every $10 purchase at GoGo, the customer receives a $1 coupon that can be redeemed toward the purchase of gasoline. The average gasoline customer purchases 15 gallons of gasoline at $2.50 per gallon. The results of an average month, prior to this coupon promotion, are shown below. Not included in the information presented below is the monthly cost of printing the coupons, which is estimated to be $500. Coupons are issued on the basis of total purchases regardless of whether the purchases are paid in cash or paid by redeeming coupons. Assume that coupons are distributed to customers for 75 percent of the total sales. Also assume that all coupons distributed are used to purchase gasoline. Cost of Sales (per unit or % of retail) $1.875 per gallon 60% 50% Sales $100,000 60,000 40,000 Gasoline Food and beverages Other products Labor-station attendants Labor-supervision Rent, power, supplies, and other Depreciation (pumps, computers, counters, fixtures, and building) Other Costs $ 10,000 2,500 40,000 7,500 Required 1 Required 2 Required 3 Required 4 Calculate the breakeven sales (in dollars) for GoGo Juice if the promotional effort is implemented. Assume that the product mix remains constant. Use the weighted average contribution margin ratio approach to generate your answer. (Hint: Sales mix for this purpose is defined on the basis of relative sales dollars, not units.) (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Show less A Breakeven sales (in dollars) GoGo Juice is a combination gas station and convenience store located at a busy intersection. Recently, a national chain opened a similar store only a block away; consequently, sales have decreased for GoGo. In an effort to reclaim lost sales, GoGo has implemented a promotional effort; for every $10 purchase at GoGo, the customer receives a $1 coupon that can be redeemed toward the purchase of gasoline. The average gasoline customer purchases 15 gallons of gasoline at $2.50 per gallon. The results of an average month, prior to this coupon promotion, are shown below. Not included in the information presented below is the monthly cost of printing the coupons, which is estimated to be $500. Coupons are issued on the basis of total purchases regardless of whether the purchases are paid in cash or paid by redeeming coupons. Assume that coupons are distributed to customers for 75 percent of the total sales. Also assume that all coupons distributed are used to purchase gasoline. Cost of Sales (per unit or % of retail) $1.875 per gallon 60% 50% Sales $100,000 60,000 40,000 Gasoline Food and beverages Other products Labor-station attendants Labor-supervision Rent, power, supplies, and other Depreciation (pumps, computers, counters, fixtures, and building) Other Costs $ 10,000 2,500 40,000 7,500 Required 1 Required 2 Required 3 Required 4 Calculate the breakeven sales (in dollars) for GoGo Juice if the promotional effort is implemented. Assume that the product mix remains constant. Use the weighted average contribution margin ratio approach to generate your answer. (Hint: Sales mix for this purpose is defined on the basis of relative sales dollars, not units.) (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Show less A Breakeven sales (in dollars)
