Flounder Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change-related services represent 80% of its sales and provide a contribution margin ratio of 15%. Brake repair represents 20% of its sales and provides a 65% contribution margin ratio. The company's fixed costs are $12,150,000 (or $67,500 per service outlet). (a) Calculate the dollar amount of each type of service that the company must provide in order to break even. Oil changes 2$ Brake repair %24

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Flounder Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and
brake repair. Oil change-related services represent 80% of its sales and provide a contribution margin ratio of 15%. Brake repair
represents 20 % of its sales and provides a 65% contribution margin ratio. The company's fixed costs are $12,150,000 (or $67,500 per
service outlet).
(a)
Calculate the dollar amount of each type of service that the company must provide in order to break even.
Oil changes
2$
Brake repair
2$
Transcribed Image Text:Flounder Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change-related services represent 80% of its sales and provide a contribution margin ratio of 15%. Brake repair represents 20 % of its sales and provides a 65% contribution margin ratio. The company's fixed costs are $12,150,000 (or $67,500 per service outlet). (a) Calculate the dollar amount of each type of service that the company must provide in order to break even. Oil changes 2$ Brake repair 2$
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