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Sandhill provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation $1,500...

Sandhill provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation $1,500 per month Advertising $400 per month Insurance $1,100 per month Weed and feed materials $14 per lawn Direct labor $13 per lawn Fuel $3 per lawn Sandhill 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 Type your answer here lawns

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Expert Solution

a) Variable cost per lawn = Materials + labor +Fuel
=$14+13+3
=$30
Contribution Margin Per Unit = Sales price - variable cost per unit
= $60-30
= $30 per unit
Monthly fixed cost = Depreciation+Advertising + Insurance
=1500+400+1100
=$3000
Break-even Point In Unit = Fixed Cost/ Contribution Margin Per Unit
= $3000/30
=100 lawns

ekkarill92 answered 2 years ago
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