Question
Rapid Auto has 185 auto-maintenance service outlets nationwide. It provides two main lines of service: oil changes and brake repair. Oil changes and related services
Rapid Auto has 185 auto-maintenance service outlets nationwide. It provides two main lines of service: oil changes and brake repair. Oil changes and related services represent 70% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 30% of its sales and provides a 60% contribution margin ratio. The company's fixed costs are $14,430,000 (that is, $78,000 per service outlet).
(a)
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.
Oil changes | $enter a dollar amount | |
---|---|---|
Brake repairs | $enter a dollar amount |
eTextbook and Media
Attempts: 1 of 3 used
(b)
The company has a desired operating income of $66,000 per service outlet. Calculate the dollar amount of each type of service that must be provided by each service outlet to meet the company's target operating income per outlet.
Required sales | ||
Oil changes | $enter a dollar amount | |
Brake repairs | $enter a dollar amount |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started