Award:00 points Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company...
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1.
Award: 20.00 points
Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn
maintenance and garden maintenance. The company charges customers $16.0 per hour for
each type of service, but lawn maintenance has higher variable costs ($6.4 per hour) than
garden maintenance ($3.2 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, 8,000 hours
of lawn maintenance services and 2,000 hours of garden maintenance were provided:
Lawn
Per
Garden
Per
Maintenance
Hour Maintenance Hour
Total
Sales
$
128,000 $ 16.0 $ 32,000
$ 16.0 $ 160,000
Variable expenses
51,200
6.4
6,400
3.2
57,600
Contribution margin
$
76,800 $ 9.6 $ 25,600 $ 12.8
102,400
Fixed expenses
50, 176
Operating income
$
52,224
Required:
1. Compute the overall CM ratio for the company.
Overall contribution margin ratio
%
2. Compute the overall break-even point for the company in sales dollars.
Overall break-even
point
3. Compute the weighted-average CM per hour for the company. (Do not round intermediate
calculations. Round your answers to 2 decimal places.
Lawn
Garden
Care
Maintenance
Weighted average CM per hour
4. Calculate the overall break-even point for the company in hours.
Total break-even point in hours
hours
O
12:52 PM
2020-02-11

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Top Answer

. Q1. overall Contribution margin (CM)=($102,400/$160,000)*100= 64% Q2. Break-even point for the company in sales dollars=... View the full answer

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