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Lenny 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
Lenny 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. Lenny 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, Lenny 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 Lenny sells four twig stands for every one oak stand. Mary charges her husband $400 to share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Lenny need to sell to breakeven? Will this affect the number of scarves Mary needs to sell to breakeven? Explain. Determine how many of each plant stand Lenny 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 Sale price per unit Less: Variable cost per unit Contribution margin per unit Sales mix Contribution margin Weighted average contribution margin per unit X i Data Table Twig Stands Oak Stands $ 16.00 $ 43.00 Sales price Variable cost $ 3.00 $ 15.00 Print Done
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