PDQ Repairs has 200 auto-maintenance service outlets nationwide. It performs

primarily two lines of service: oil changes and brake repair. Oil changerelated 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 companys

fi xed costs are $15,600,000 (that is, $78,000 per service outlet).

Instructions

(a) Calculate the dollar amount of each type of service that the company must provide in

order to break even.

(b) 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?