Express Delivery is a 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, Express believes that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $13,758,900. (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 rounded to 2 decimal places eg. 0.22 and round final answers to 0 decimal places, e.g. 2,510) Total break-even sales Sale of mail pouches and small boxes $ Sale of non-standard boxes (b) The company's management would like to hold its fixed costs constant but shift its 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 places e.g. 0.22 and round final answers to 0 decimal places, e.g. 2,510.) Total break-even sales Sale of mail pouches and small boxes Sale of non-standardized boxes $ $ 15287667 $
Express Delivery is a 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, Express believes that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $13,758,900. (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 rounded to 2 decimal places eg. 0.22 and round final answers to 0 decimal places, e.g. 2,510) Total break-even sales Sale of mail pouches and small boxes $ Sale of non-standard boxes (b) The company's management would like to hold its fixed costs constant but shift its 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 places e.g. 0.22 and round final answers to 0 decimal places, e.g. 2,510.) Total break-even sales Sale of mail pouches and small boxes Sale of non-standardized boxes $ $ 15287667 $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
answer in text form please (without image)
Transcribed Image Text:Express Delivery is a 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, Express believes
that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $13,758,900.
(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 rounded to 2 decimal places eg. 0.22 and round final
answers to 0 decimal places, e.g. 2,510)
Total break-even sales
Sale of mail pouches and small boxes
Sale of non-standard boxes
Total break-even sales
Sale of mail pouches and small boxes.
$
Sale of non-standardized boxes
$
(b) The company's management would like to hold its fixed costs constant but shift its 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 places eg. 0.22 and round final answers to 0 decimal places, e.g. 2,510.)
$
$
$
15287667
$
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education