Twig Stands

Oak Stands

Sales price. . . . . . . . . . . . .

$14.00

$40.00

Variable cost. . . . . . . . . . . .

2.00

18.00

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Part 1

Curtis

Braun admired his wife's success at selling scarves at local craft shows, so he decided to make two types of plant stands to sell at the shows.

Curtis

makes twig stands from twigs he collects from a friend's farm, so his variable cost is minimal (wood screws, glue, and so forth). However,

Curtis

has to purchase wood to make his oak plant stands. His unit prices and costs are as follows:

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The twig stands are more popular, so

Curtis

sells four twig stands for every one oak stand.

Ramona

charges her husband

$350

to share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does

Curtis

need to sell to break even? Will this affect the number of scarves

Ramona

needs to sell to break even? Explain.

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Part 1

Determine how many of each plant stands

Curtis

needs to sell to break-even. Begin by computing the weighted-average contribution margin per unit. First identify the formula labels, then complete the calculations step by step. Twig Stands

Oak Stands

Sales price. . . . . . . . . . . . .

$14.00

$40.00

Variable cost. . . . . . . . . . . .

2.00

18.00

Deduct:
Weighted-average contribution margin per unit