Question

Question 1 Concord provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation $1,800 per month Advertising $300 per month Insurance $900 per month Weed and feed materials $11 per lawn Direct labor $17 per lawn Fuel $2 per lawn Concord charges $60 per treatment for the average single-family lawn. (a) Determine the company's break-even point in number of lawns serviced per month Break-even point lawns Attempts: 0 of 1

Answer 1

	Selling price per lawn					60
	less:Variable cost per lawn
	Weed and feed materials				11
	Direct labor				17
	Fuel				2	30
	Contribution per lawn					30
	Fixed cost
	Depreciation				1,800
	Advertising				300
	insurance				900
	total fixed cost				3,000
a)	BEP =	Fixed cost/contribution per lawn
		3000/30
		100
b)	BEP(dollars)=		100*60
			6000