Question
Mountain Maples is a mail-order nursery dedicated to growing, selling, and shipping beautiful Japanese maple trees. They offer two types: Butterfly and Moonfire. They are
Mountain Maples is a mail-order nursery dedicated to growing, selling, and shipping beautiful Japanese maple trees. They offer two types: Butterfly and Moonfire. They are sold after 5 growing seasons and revneue and cost data are as follows:
Units SoldSelling Price per UnitVariable cost per unit
Butterfly600 $300 $150
Moonfire400 $400 $300
Fixed costs were $78,000.
1. How many Japanese maples must Mountain Maples sell in a year to break even? At this sales volume, how many Butterfly and Moonfire trees are sold?
2. At the current product mix, how many Butterfly trees must they sell in a year to earn an after tax profit of $23,400, assuming the tax rate is 40%?
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