Question

All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation $1,400 per month Advertising $1,068 per month Insurance $1,900 per month Weed and feed materials $11 per lawn Direct labor $8 per lawn Fuel $2 per lawn All That Blooms charges $63 per treatment for the average single-family lawn.

Determine the company’s break-even point in number of lawns serviced per month. Break-even point lawns LINK TO TEXT LINK TO TEXT

Determine the company’s break-even point in dollars. (Round answer to 0 decimal places, e.g. 1,225.) Break-even point $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

Answer

• Requirement 1:
  Break even point = 104 lawns
• Requirement 2:
  Break even point = $ 6,552 [104 x $ 63]
• Working

	Depreciation	$1,400
	Advertising	$1,068
	Insurance	$1,900
A	Total Fixed Cost	$4,368
B	Sales revenue	$63
	Weed & Feed materials	$11
	Direct labor	$8
	Fuel	$2
C	Total Variable cost per unit	$21
D = B - C	Unit Contribution margin	$42
E = A/D	Break Even point in no. of lawns	104