Exercise 5-8 All That Blooms provides environmentally friendly lawn services for
ID: 2340217 • Letter: E
Question
Exercise 5-8 All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows 1,400 per month s 2,270 per month $ 2,000 per month $15 per lawn 12 per lawn Depreciation Insurance Weed and feed materials Direct labor Fuel $ 2 per lawn All That Blooms charges $ 83 per treatment for the average single-family lan Determine the company's break-even point in number of lawns serviced per month Break-even point lawns LINK TO TEXT LINK TO TEXT SIMILAR EXERCISE VIDEO Determine the company's break-even point in dollars. (Round answer to o decimal places, e.g.1,225.) Break-even pointsExplanation / Answer
Total variable cost per lawn=Weed and feed materials+Direct labor+Fuel
=(15+12+2)=$29 per lawn
Total fixed costs=Depreciation+Advertising+Insurance
=(1400+2270+2000)=$5670
Contribution margin=Sales revenue-Variable cost
=(83-29)=$54
Hence 1.Breakeven point=Fixed cost/Contribution margin
=(5670/54)=105 lawns
2.Breakeven value=(105*83)=$8715