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PDQ Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two links of service: oil changes and brake repair. Oil change-related services represent 70%
PDQ Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two links 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 $15,620,800 (that is, $78,104 per service outlet). (a) 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 eg. 0.25 and round final answers to 0 decimal places, eg. 2,510.)
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