How many japanese maples must mountain maples sell in a year

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Reference no: EM132977223

Mountain Maples is a mail-order nursery dedicated to growing, selling, and shipping beautiful Japanese Maple trees. Located on a ridge-top in Mendocino County, northern California, Mountain Maples offers two distinctive types of Japanese Maples: Butterfly and Moonfire.

The trees are sold after five growing seasons, and revenue and cost data for each tree type (for the most recent year) are as follows:

                            Butterfly                Moonfire

Quantity sold           800                  1,600

Selling price per tree   $200                    $100

Variable cost per tree      $100                    $50

Mountain Maples' fixed costs for the most recent year were $75,000.

Problem a: How many Japanese Maples must Mountain Maples sell in a year to break even? At this sales volume, how many Butterfly and Moonfire trees are sold?

Problem b: At the current product mix, how many Butterfly trees must Mountain Maples sell in a year to earn a profit of $50,000?

Problem c: Assume that Mountain Maples product mix changes to 50% Butterfly and 50% Moonfire. How does this information change your answer to part (a)?

Reference no: EM132977223

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