Do not give answer in image James is considering opening a Fast'n Clean Car Service Center. He estimates that the following costs will be incurred during his firstyear of operations: Rent $9,300, Depreciation on equipment $7,100, Wages $16,916, Motor oil $2 per quart. He estimates that eachoil change will require 5 quarts of oil. Oil filters will cost $3.00 each. He must also pay The Fast 'n Clean Corporation a franchise fee of$1.10 per oil change since he will operate the business as a franchise. In addition, utility costs are expected vary with the quantity of oilchanges as follows:Quantity of Oil Changes4,1006,1009,10012.100(a)14,200Utility Costs$6,410$7,800$10,100$13,100$15,500James anticipates that he can provide the oil change service with a filter at $25.92 each (b)Determine the break-even sales quantity of oil changes and sales dollars. (Round Contribution margin ratio to 2 decimal places, e.g.57.20%. Round final answers to 0 decimal places, e.g. 5720)Break-even oil changes in unitsBreak-even sales in dollars

Answer:- Formulas:- 1. Break-even point (Units) = Fixed cost / Contribution margin per unit2.…

Answered: James is considering opening a Fast 'n…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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