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Curtis Cobb admired his wife's success at selling scarves at local crafts shows, so he decided to make two types of plant stands to sell
Curtis Cobb admired his wife's success at selling scarves at local crafts shows, so he decided to make two types of plant stands to sell at the shows. Curtis 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, Curtis has to purchase wood to make his oak plant stands. His unit prices and costs are as follows: (Click the icon to view the data.) The twig stands are more popular, so Curtis sells four twig stands for every one oak stand. Mary charges her husband $255 to share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Curtis need to sell to breakeven? Will this affect the number of scarves Mary needs to sell to breakeven? Explain Data table Concurs siep by step Sale price per unit Less: Variable cost per unit Contribution margin Sales mix Contribution margin per unit Twig Stands Oak Stands Twig Oak Total 17 42 3.50 11 Sales price. Variable cost 17.00 5 42.00 3.50 $ 11.00 13.5 31 Weighted average contribution margin per unit Next determine the formula to compute the breakeven sales in units. (Abbreviations used: Avg. average and CM contribution margin.) Determine how many of each plant stands Curtis needs to set to breakeven Breakeven sales in units Print Done Breakeven sales of twig stands is units Breakeven sales of oak stands is units Will this affect the number of scarves Mary needs to sell to breakeven? Explain. By charging her husband part of the craft fair entrance fees, her fixed costs will decided to share her craft booths Therefore, Mary will need to sell scarves to breakeven than before her husband
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