Question
1. Compute the overall CM ratio for the company. (as a percent) 2. Compute the overall break-even point for the company in sales dollars. 3.
1. Compute the overall CM ratio for the company. (as a percent)
2. Compute the overall break-even point for the company in sales dollars.
3. Compute the weighted-average CM per hour for the company. ( for both lawn maintenance and garden maintenance
4. Calculate the overall break-even point for the company in hours.
5. At the overall break-even point in total hours, how many hours of each service must be provided for the company to break-even? ( for both lawn maintenance and garden maintenance
6. Calculate the overall sales in dollars required to earn an after-tax profit of $53,760 if the tax rate is 30%.
Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: fawn maintenance and garden maintenance. The company charges customers $20.0 per hour for each type of service, but lawn maintenance has higher variable costs ($12.0 per hour) than garden maintenance ($6.0 per hour) because of fuel expenses incurred to operate lawn-mowing equipment. All employees are paid a fixed monthly salary. A contribution format income statement for a recent month for the two services appears below. During the month, 8,000 hours of lawn maintenance services and 2,000 hours of garden maintenance were provided: si Lawn Der Garden Per Maintenance Hour Maintenance Hour Total Sales $ 160,000 $20.0 $ 40,000 $20.0 $ 200.000 Variable expenses 96,000 12.0 12,000 /6.0 108,000 Contribution margin $ 64,000 $8.0 $ 28,000 $14. 0 92,000 520 Fized expenses Operating income Required
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