Question

Exercise 22-5 (Part Level Submission) All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. $1,400 per month $2,136 per month $1,000 per month $20 per lawn $16 per lawn $3 per lawn Depreciation Advertising Insurance Weed and feed materials Direct labor Fuel All That Blooms charges $81 per treatment for the average single-farmily lawn. [ Your answer is incorrect. Try again. Determine the company's break-even point in number of lawns serviced per month Break-even point116.3 lawns The parts of this question must be completed in order. This part wil be avaliable when you complete the part above

Answer 1

Break-even point in number of lawns serviced per month

Break-even pointy in lawn = Total Fixed costs / Contribution per lawn

Total Fixed Cost = Depreciation Expenses + Advertising Expenses + Insurance Expenses

= $1,400 + 2,136 + 1,000

= $4,536

Variable cost per lawn = Weed and feed materials + Direct Labor + Fuel

= $20 + 16 + 3

= $39 per lawn

Contribution per lawn = Selling price per lawn – Variable cost per lawn

= $81.00 – 39.00

= $42 per lawn

Therefore, Break-even pointy in lawn = Total Fixed costs / Contribution per lawn

= $4,536 / $42 per lawn

= 108 Lawn

“Break-even point = 108 Lawns”