Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

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.

Correct answer icon

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

eTextbook and Media

New attempt is in progress. Some of the new entries may impact the last attempt grading.

Your answer is incorrect.

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

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_2

Step: 3

blur-text-image_3

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

Financial and Managerial Accounting

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

2nd edition

978-1119036357, 1119036356, 1118338413, 1118334264, 978-1118338414, 978-1118334263

More Books

Students explore these related Accounting questions