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Problem - Sandhill provides environmental friendly lawn services for homeowners. Its operating costs are as follows.
Depreciation $1,500 per month
Advertising $250 per month
Insurance $3,530 per month
Weed and feed materials $25 per lawn
Direct labor $6 per lawn
Fuel $1 per lawn
Sandhill charges $80 per treatment for the average single-famiIy lawn.
Required -
a) Determine the company's break-even point in number of lawns serviced per month.
b) Determine the company's break-even point in dollars.
Sparrow Co. is currently operating at 80% of capacity and is currently purchasing a part used in its manufacturing operations for $8.00 a unit. The unit cost for Sparrow Co.
If fixed costs are $240,000, the unit selling price is $32, and the unit variable costs are $20, what are the old and new break-even sales (units) if the unit selling price increases by $4?
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