Exercise 11-8 Monty provides environmentally friendly lawn services for homeowne

Question

Exercise 11-8 Monty provides environmentally friendly lawn services for homeowners. Its operating costs are as follows Depreciation Advertising Insurance Weed and feed materials Direct labor Fuel $1,800 per month $400 per month $9,140 per month $15 per lawn $40 per lawn $3 per lawn Monty charges $100 per treatment for the average single-family lawn Determine the company's break-even point in number of lawns serviced per month Break-even point awns LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR PROBLEM VIDEO: APPLIED SKILLS Determine the company's break-even point in dollars. (Round answer to 0 decimal places, e.g. 1,225.) Break-even point LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR PROBLEM VIDEO: APPLIED SKILLS

Explanation / Answer

A) break even point :

Fixed cost = (1800+400+9140) = 11340

Variable cost per lawn = (15+40+3) = 58 per lawn

Selling price per lawn = 100 per lawn

Break even point = Fixed cost/(selling price per lawn-variable cost per lawn)

= 11340/(100-58)

Break even point = 270 lawns

Break even point (270*100) = $27000

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