Question
Rapid Auto has 230 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 230 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 companys fixed costs are $20,240,000 (that is, $88,000 per service outlet). 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 44275000 Brake repairs $enter a dollar amount 18975000 The company has a desired operating income of $50,000 per service outlet. Calculate the dollar amount of each type of service that must be provided by each service outlet to meet the companys target operating income per outlet. Required sales Oil changes $enter a dollar amount Brake repairs $enter a dollar amount
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