Rapid Auto has over 200 auto-maintenance service outlets nationwide. It provides
ID: 2372312 • Letter: R
Question
Rapid Auto 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 65% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 35% of its sales and provides a 60% contribution margin ratio. The company's fixed costs are $16,000,000 (that is, $80,000 per service outlet).
Mega Electronix sells television sets and DVD players. The business is divided into two divisions along product lines. CVP income statements for a recent quarter's activity are presented below.
Contribution margin ratio
Explanation / Answer
Answer 2: a) Oil changes $ 30588235 Break repairs $ 16470588 b) Oil changes $ 267647 Break repairs $ 144118
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