Extension of E7-26: multiproduct firm (Learning Objective 4)

Arlan Braun admired his wife’s success at selling scarves at local crafts shows (E7-26), so he decided to make two types of plant stands to sell at the shows. Arlan makes twig stands out of downed wood from his backyard and the yards of his neighbors, so his variable cost is minimal (wood screws, glue, and so forth). However, Arlan has to purchase wood to make his oak plant stands. His unit prices and costs are as follows:

The twig stands are more popular, so Arlan sells four twig stands for every one oak stand. DeAnna charges her husband $300 to share her booth at the crafts shows (after all, she has paid the entrance fees). How many of each plant stand does Arlan need to sell to break even? Will this affect the number of scarves DeAnna needs to sell to break even? Explain.

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Sales price. Variable cost Twig Stands $15.00 2.50 Oak Stands $35.00 10.00