Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $15 per hour for each type of service, but lawn maintenance has higher variable costs ($3.00 per hour) than garden maintenance ($6.00 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, 3,500 hours of lawn maintenance services and 875 hours of garden maintenance were provided:

lawn Maintenance

Per hour

Garden Maintenance

Per Hour

Total

Sales

52,500

$15

$13,125

$15.00

$65,625

Variable Expenses

10,500

$3.00

5,250

6

15,750

Contribution Margin

$42,000

$12.00

$7,875

$9.00

$49,875

Fixed Expenses

$47,880

Operating Income

$1,995

Required:

1.

Compute the overall CM ratio for the company

2)

2.

Compute the overall break-even point for the company in sales dollars

3.

Compute the weighted-average CM per hour for the company. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

		Lawn Care		Garden Maintenance
Number of Hours

4.

Calculate the overall break-even point for the company in hours

5.

At the overall break-even point in total hours, how many hours of each service must be provided for the company to break-even?

Lawn Care

Garden Maintenance

Number of Hours

6.	Calculate the overall sales in dollars required to earn an after-tax profit of $79,800 if the tax rate is 30%.