Question
Pharoah Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair. Oil changerelated services represent 80%
Pharoah Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair. Oil changerelated services represent 80% of its sales and provide a contribution margin ratio of 25%. Brake repair represents 20% of its sales and provides a 35% contribution margin ratio. The companys fixed costs are $15,660,000 (that is, $78,300 per service outlet). Sales mix is determined based upon total sales dollars.
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Your answer is correct.
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.)
Sales Dollars Needed Per Product | ||
---|---|---|
Oil changes | $enter a dollar amount | |
Brake repair | $enter a dollar amount |
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The company has a desired net income of $50,004 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.)
Sales Dollars Needed Per Service Outlet | ||
---|---|---|
Oil changes | $enter a dollar amount | |
Brake repair | $enter a dollar amount |
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