Question

In: Operations Management

JD’s Firewood is a small locally owned supplier of firewood to consumers that use wood boilers...

  1. JD’s Firewood is a small locally owned supplier of firewood to consumers that use wood boilers to heat their homes. JD’s offers a variety of seasoned hardwood for sale by the cord with varying prices. In addition, he also sells coal by the ton to customers as a heat fuel. JD’s is interested in determining the breakeven point based on the following expenses: Rent, utilities, and insurance per month is $540.00. Salaries per week are $1,260.00. JD’s Firewood is open 5 days per week. Use two decimal points and round up or down accordingly.
    1. What is the breakeven point in dollars using the information presented below?
    2. What is the breakeven point per day of operation?
    3. Based on the data presented, how much of each product should JD have in stock each week to breakeven?

Item

Price

Cost

Annual Forecasted Sales (Units)

Seasoned Oak (per cord)

$120.00

$16.00

340

Seasoned Maple (per cord)

$125.00

$18.00

180

Mixed Softwoods (per cord)

$80.00

$12.00

420

Coal (per ton)

$120.00

$80.00

504

Solutions

Expert Solution

Please refer the images below one by one :

Image 1 = answer a (Answer = $126,040)

image 2 = answer b (Answer =$418)

image 3 = answer c


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