Question
Sheridan 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%
Sheridan 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 20%. Brake repair represents 20% of its sales and provides a 40% contribution margin ratio. The companys fixed costs are $15,580,800 (that is, $77,904 per service outlet). The sales mix is determined based upon total sales dollars.
Calculate the dollar amount of each type of service that the company must provide in order to break even.
| Oil changes | $ | |
|---|---|---|
| Brake repair | $ |
The company has a desired net income of $51,000 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?
| Sales Dollars Needed Per Service Outlet | ||
|---|---|---|
| Oil changes | $ | |
| Brake repair | $ | |
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
Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
