Curtis Rhode 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 fourtwig stands for every one oak stand. Jennifer charges her husband $360 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 Jennifer needs to sell to breakeven? Explain. Determine how many of each plant sland Curtis needs to sell to breakeven. Begin by computing the weighted average contribution margin per unit. First identify the formula labels, then complete the calculations step by step. Oak Total $ Twig 18.00 S 3.00 38.00 8.00 15.00 30.00 Sale price per unit Less Variable cost per unit Contribution margin per unit Sales mix Contribution margin Weighted average contribution margin per unit 4 5 60.00'S 30.00 90.00 S 18.00 Next determine the formula to compute the breakeven sales in units. (Abbreviations used: Avg. = average and CM = contribution margin.) Fixed expenses Operating income )/ Weighed-avg. CM per unit = Breakeven sales in units Determine how many of each plant stands Curtis needs to sell to breakeven. + units. Breakeven sales of twig stands is Breakeven sales of oak stands is unils Curtis Rhode 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 fourtwig stands for every one oak stand. Jennifer charges her husband $360 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 Jennifer needs to sell to breakeven? Explain. Determine how many of each plant sland Curtis needs to sell to breakeven. Begin by computing the weighted average contribution margin per unit. First identify the formula labels, then complete the calculations step by step. Oak Total $ Twig 18.00 S 3.00 38.00 8.00 15.00 30.00 Sale price per unit Less Variable cost per unit Contribution margin per unit Sales mix Contribution margin Weighted average contribution margin per unit 4 5 60.00'S 30.00 90.00 S 18.00 Next determine the formula to compute the breakeven sales in units. (Abbreviations used: Avg. = average and CM = contribution margin.) Fixed expenses Operating income )/ Weighed-avg. CM per unit = Breakeven sales in units Determine how many of each plant stands Curtis needs to sell to breakeven. + units. Breakeven sales of twig stands is Breakeven sales of oak stands is unils
