Answered: Determine the company's break-even…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Blossom provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.

Depreciation (straight-line)	$1,500	per month
Advertising	$350	per month
Insurance	$3,610	per month
Weed and feed materials	$20	per lawn
Direct labor	$7	per lawn
Fuel	$1	per lawn

Blossom charges $80 per treatment for the average single-family lawn. For the month ended July 31, 2022, the company had total sales of $9,600.

Determine the company's break-even point in (1) number of lawns serviced per month and (2) sales dollars.
(1) Break-even point in lawns
(2) Break-even point in dollars
%24

Prepare a CVP income statement for the month ended July 31, 2022.
BLOSSOM
CVP Income Statement
Total
Per Unit
Percent of Sales
%24
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