All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows....

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All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows....

All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.

Depreciation	$1,224	per month
Advertising	$153	per month
Insurance	$1,683	per month
Weed and feed materials	$10	per lawn
Direct labor	$8	per lawn
Fuel	$2	per lawn

All That Blooms charges $50 per treatment for the average single-family lawn.

Determine the company

business accounting

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Answer 1

Answer #1

Total fixed costs = depreciation + advertising + insurance = 1224 + 153 + 1683 = $3060/month

Total variable cost per unit = weed + direct labor + fuel = 10 + 8 + 2 = $20/lawn

Contribution margin ratio = (sales per unit - variable cost per unit) / sales per unit = (50 - 20) / 50 = 60%

Breakeven sales = fixed costs / contribution margin ratio = 3060 / 60% = $ 5100

Breakeven sales units = breakeven sales / sales per unit = 5100 / 50 = 102 lawns

Answer: Breakeven point = 102 lawns and breakeven sales point = $5100

Hope this helped ! Let me know in case of any queries.

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Answer 2

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