Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $18 per hour for each
Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $18 per hour for each type of service, but lawn maintenance has higher variable costs (56 per hour) than garden maintenance ($3 per hour) because of fuel expenses incurred to operate lawn mowing equipment. All employees are paid a fixed monthly salary, A contribution format Income statement for a recent month for the two services appears below. During the month, 8,800 hours of lawn maintenance services and 2,200 hours of garden maintenance were provided Lawn Per Garden Per Maintenance Hour Maintenance Hour Total Sales $158,400 $18 $39,600 $18 $ 198,000 Variable expenses 52,800 6 6.600 3 59,400 Contribution margin $105,600 $12933,000 $15 138,600 Fixed expenses 75.600 Operating income $ 63,000 c) Assuming the same sales mix, at a total combined break even level, what is the contribution margin (in dollars, to the nearest dollar) for lawn maintenance
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started