Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Sunland Auto has 200 auto-maintenance service outlets nationwide. It provides two main lines of service: oil changes and brake repair. Oil changes and related services

image text in transcribedimage text in transcribed

Sunland Auto has 200 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 $15,600,000 (that is, $78,000 per service outlet). Calculate the dollar amount of each type of service that the company must provide in order to break even. The company has a desired operating income of $56,400 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions