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 changerelated services represent60% of

PDQ Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair. Oil changerelated services represent60% of its sales and provide a contribution margin ratio of20%. Brake repair represents40% of its sales and provides a45% contribution margin ratio. The companys fixed costs are $15,800,000(that is, $79,000per 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 0 decimal places, e.g. 2,510.)
Oil changes $
Brake repair $
LINK TO TEXT
The company has a desired net income of $52,000per 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.)
Oil changes $
Brake repair

$

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Fundamental Managerial Accounting Concepts

Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old

7th edition

978-0077632427, 77632427, 78025656, 978-0078025655

Students also viewed these Accounting questions