Sheridan Delivery is a rapidly growing delivery service. Last year, 80% of its revenue came from the delivery of mailing pouches 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, Sheridan believ that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $12,981,90 Sales mix is determined based upon total sales dollars. (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 e.g. 0.22 and round finall answers to 0 decimal places, eg. 2,510)
Sheridan Delivery is a rapidly growing delivery service. Last year, 80% of its revenue came from the delivery of mailing pouches 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, Sheridan believ that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $12,981,90 Sales mix is determined based upon total sales dollars. (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 e.g. 0.22 and round finall answers to 0 decimal places, eg. 2,510)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
208.
Subject
Accounting
Transcribed Image Text:CUITCHILA
Sheridan 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, Sheridan believes
that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $12,981,900.
Sales mix is determined based upon total sales dollars.
(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 O decimal places, eg. 2,510)
Total break-even sales
Sale of mail pouches and small boxes $
Sale of non-standard boxes
$
Total break-even sales
(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 O decimal places, e.g. 2,510)
Sale of mail pouches and small boxes $
Sale of non-standardized boxes
1
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