Exercise 19-8

All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.

Depreciation		$1,400	per month
Advertising		$520	per month
Insurance		$1,200	per month
Weed and feed materials		$10	per lawn
Direct labor		$8	per lawn
Fuel		$2	per lawn

All That Blooms charges $50 per treatment for the average single-family lawn.

Determine the companys break-even point in number of lawns serviced per month.

Break-even point

lawns

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Determine the companys break-even point in dollars. (Round answer to 0 decimal places, e.g. 1,225.)

Break-even point

$

Exercise 19-17

Felde Bucket Co., a manufacturer of rain barrels, had the following data for 2016.

Sales		2,500	units
Sales price		$50	per unit
Variable costs		$35	per unit
Fixed costs		$19,200

What is the contribution margin ratio? (Round answer to 0 decimal places, e.g. 5,275.)

Contribution margin ratio

%

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What is the break-even point in dollars? (Round intermediate calculation and final answers to 0 decimal places, e.g. 5,275.)

Break-even point

$

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What is the margin of safety in dollars and as a ratio? (Round ratio to 2 decimal places, e.g. 12.25.)

Margin of safety		$
Margin of safety ratio			%

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If the company wishes to increase its total dollar contribution margin by 30% in 2017, by how much will it need to increase its sales if selling price per unit, variable price per unit and total fixed costs remain constant? (Round answer to 0 decimal places, e.g. 2,520.)

Total increase in sales required:

$