Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 70%

image text in transcribed
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 70% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 30% of its sales and provides a 40% contribution margin ratio. The company's fixed costs are $15,600,000 (that is, $78,000 per service outlet). Calculate the dollar amount of each type of service that the company must provide in order to break even. The company has a desired net income of $52,000 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

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

Audit Cultures Anthropological Studies In Accountability Ethics And The Academy

Authors: Marilyn Strathern

1st Edition

0415233275, 978-0415233279

More Books

Students also viewed these Accounting questions

Question

1. Why do people tell lies on their CVs?

Answered: 1 week ago

Question

2. What is the difference between an embellishment and a lie?

Answered: 1 week ago