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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
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
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