Danny Brown admired his wife's success at selling scarves at local crafts shows, so he decided to make two types of plant stands to sell the shows. Danny 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, Danny 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 Danny sells four twig stands for every one oak stand. DeAnna charges her husband $240 share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Danny need to sell to breakeven? Will this affect the number of scarves DeAnna needs to sell to breakeven? Explain. C. Determine how many of each plant stand Danny 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. Twig Oak Total Less 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.) Breakeven sales in units Danny Brown 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. Danny 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, Danny 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 Danny sells four twig stands for every one oak stand. DeAnna charges her husband $240 to share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Danny need to sell to breakeven? Will this affect the number of scarves DeAnna needs to sell to breakeven? Explain. Data table 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.) Twig Stands Oak Stands Sales price 16.00 $ 39.00 Variable cost ........... $ 2.00 $ 15.00 Breakeven sales in units Determine how many of each plant stands Danny needs to sell to breakeven. units Breakeven sales of twig stands is Breakeven sales of oak stands is Print Done units. Will this affect the number of scarves DeAnna needs to sell to breakeven? Explain. Therefore, DeAnna will need to sell scarves to breakeven than before her husband decided to share her craft By charging her husband part of the craft fair entrance fees, her fixed costs will booths
