Question - PDQ 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 30 % contribution margin ratio. The company's fixed costs are $ 15,650,000 (that is, $ 78,250 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 net income of $ 54,000 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?