Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sheridan Delivery is rapidly growing delivery service. Last year 80% of its revenue came from the delivery of mailing pouches and small standardized delivery boxes

image text in transcribed
Sheridan Delivery is rapidly growing delivery service. Last year 80% of its revenue came from the delivery of mailing pouches and small standardized delivery boxes (which provides a 20% contribution margin. The other 20% of its revenue came from delivering non-standardized boxes (which provides a 70% contribution margin. With the rapid growth of Internet retail sales Sheridan believes that there are great opportunities for growth in the delivery of non standardized boxes. The company has foed costs of $12.981,900. Sales mix is determined based upon total sales dollar (a) What is the company's break-even point in total sales dollars? At the break-even point, how much of the company's sales are provided by each type of service? (Use Weighted Average Contribution Margin Ratio remanded to 2 decimal places 0.22 and round final answers to decimal places, s. 2510) Total break-even sales Sale of mail pouches and small boxess Sale of non-standard boxes $ (b) The company's management would like to hold its fed costs constant but shiftits sales mix so that 60% of its revenue comes from the delivery of non-standardized boxes and the remainder from pouches and small boxes. If this were to occur what would be the company's break-even sales, and what amount of sales would be provided by each service type? (Use Weighted Average Contribution Margin Ratio rounded to 2 decimal ploceses. 0.22 and round final answers to decimal places, es 2.510) Total break-even sales $ Sale of mail pouches and small boxes $ Sale of non-standardized boxes

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

Step: 3

blur-text-image

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

Auditing Information Systems

Authors: Mario Piattini

1st Edition

1878289756, 9781878289759

More Books

Students also viewed these Accounting questions