Weygandt, Financial & Managerial Accounting, 2e PRENTER VERSZON Exercise 19-8 (P

Question

Weygandt, Financial & Managerial Accounting, 2e PRENTER VERSZON Exercise 19-8 (Part Level Submission) All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. $ 1,400 per month $2,745 per month s 1,000 per month Weed and feed materials Direct labor 19 per lawn s 15 per lawn $3 per lawn All That Blooms charges $ 86 per treatment for the average single-family lawn. (a) Br Your answer is correct Determine the company's break-even point in number of lawns serviced per month. 105 lawns ANEWER Attempts: 2 of 3 used (b) Oetermine the company's break-even poinc in dailars. (Round answer to O decimat places, e.g. 1.225,

Explanation / Answer

a. Breakeven point = Fixed cost / Contribution per unit = 5145 / 86-37 = 5145 / 49 = 105 units

b. Break even point in dollars = fixed cost / Contribution margin = 5145 / (49 / 86) = 5145 / 0.5698 = $9030  

or

Break even in dollars = 105 units * 86 = $9030

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