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 60%

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 60% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 40% of its sales and provides a 45% contribution margin ratio. The company's fixed costs are $15, 800,000 (that is, $79,000 per service outlet). Calculate the dollar amount of each type of service that the company must provide in order to break even. (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to O decimal places, e.g. 2, 510.) 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? (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to 0 decimal places, e.g. 2, 510.)

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

Managerial Accounting For Decision Making

Authors: Seohee Park

1st Edition

B08HCQCN2G

More Books

Students also viewed these Accounting questions

Question

=+necessary for your test to be valid.

Answered: 1 week ago

Question

b. Where did they come from?

Answered: 1 week ago