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Andrew Sinclair operates a lawn care business. He offers customers a choice of two services. The first service, basic lawn care, includes mowing and trimming
Andrew Sinclair operates a lawn care business. He offers customers a choice of two services. The first service, basic lawn care, includes mowing and trimming of all lawn areas. Andrew bills these customers $ 37 per hour, and his variable cost for providing this service is $ 25 per hour. Andrew also offers deluxe lawn care services, which includes flower bed maintenance in addition to basic lawn care. He bills his customers $ 68 per hour for this service, and his variable cost for providing this service is $ 32 per hour. Andrew currently spends 1 hour of his time providing deluxe lawn care services for every 4 hours of basic lawn care services. Andrew also incurs $ 67,200 in fixed costs per year running his business.
How many hours of each service type must Andrew provide in a year to break even? (Use contribution margin per hour to calculate the answer.)
Deluxe lawn care hours | enter the number of hours | |
---|---|---|
Basic lawn care hours |
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