Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Wildhorse Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair. Oil change-related services represent 70%

image text in transcribed
Wildhorse Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair. Oil change-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 40% contribution margin ratio. The company's fixed costs are $14,040,000 (that is, $70,200 per service outlet). Sales mix is determined based upon total sales dollars. (a) Your answer is correct: Calculate the dollar amount of each type of service that the company must provide in order to break even. (Use WeightedAverage Contribution Marsin Rotio rounded to 2 decimal places e.g. 0.25 and round final answers to 0 decimal places, e.g. 2,510.) eTextbook and Media Attempts: 3 of 5 used (b) The company has a desired net income of $46,800 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? (Use Weighted-Averoge Contribution Marsin Ratio rounded to 2 decimal places e.g. 0.25 and round final answers to 0 decimal places, e.g. 2.510.)

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