Question
Pro Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change-related services represents
Pro Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change-related services represents 75% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 25% of its sales and provides a 60% contribution margin ratio. The Company's fixed costs are RM15,000,000 (that is, RM75,000 per service outlet).
The company has a desired net income of RM45,000 per service outlet. What is the RM amount of each type of service that must be provided by each service outlet to meet its target net income per outlet?
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