Oriole provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation Advertising Insurance $1,500 per month $400 per month $3,560 per month Weed and feed materials $24 per lawn Direct labor Fuel $3 per lawn $1 per lawn Oriole charges $80 per treatment for the average single-family lawn. Determine the company's break-even point in the number of lawns serviced per month.

Oriole provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation Advertising Insurance $1,500 per month $400 per month $3,560 per month Weed and feed materials $24 per lawn Direct labor Fuel $3 per lawn $1 per lawn Oriole charges $80 per treatment for the average single-family lawn. Determine the company's break-even point in the number of lawns serviced per month.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 5CE: Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each...

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Oriole provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation $1,500 per month Advertising $100 per month Insurance $4,035 per month Weed and feed materials $17 per lawn Direct labor $3 per lawn Fuel $1 per lawn Oriole charges $70 per treatment for the average single-family lawn. (A) Determine the company’s break-even point in number of lawns serviced per month. Break-even point Type your answer here lawns (B) Determine the company’s break-even point in dollars. Break-even point $Type your answer here
E19-8 All/That Blooms provides environmentally friendly lawn services for homeowners. Its operáting costs are as follows. Depreciation Advertising $1,400 per month $200 per month month $2,000 per $12 per lawn $10 per lawn $2 per lawn Insurance Weed and feed materials Direct labor Fuel All That Blooms charges $60 per treatment for the average single-family lawn. Instructions Determine the company's break-even point in (a) number of lawns serviced per month and (b) dollars. The inn has 50 Co
Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Required: 1. Calculate the prime cost per cleaning. 2. Calculate the conversion cost per cleaning. 3. Calculate the total variable cost per cleaning. 4. Calculate the total service cost per cleaning. 5. What if rent on the office that Jean and Tom use to run HHH increased by 1,500? Explain the impact on the following: a. Prime cost per cleaning b. Conversion cost per cleaning c. Total variable cost per cleaning d. Total service cost per cleaning
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Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed at a flat rate for each service, and most costs of providing the service are the same, given the similarity in the lawns and lots. The owner budgets income by estimating two factors that fluctuate with the economy: the contribution margin associated with each service call and the number of customers who will request lawn service. Looking at next year, the owner develops the following estimates of contribution margin (price less variable cost of the service, including labor) and the estimated number of service calls. Although the owner understands that it is not strictly true, the owner assumes that the cost of fuel and the number of customers are Independent. Contribution Margin per Service Call Scenario Excellent Fair Poor (Price - Number of Variable cost) Service Calls $:30 20 12 10,450 8,000 5,700 In addition to the variable costs of service, the owner estimates that other costs are $51,000…
Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed at a flat rate for each service, and most costs of providing the service are the same, given the similarity in the lawns and lots. The owner budgets income by estimating two factors that fluctuate with the economy: the contribution margin associated with each service call and the number of customers who will request lawn service. Looking at next year, the owner develops the following estimates of contribution margin (price less variable cost of the service, including labor) and the estimated number of service calls. Although the owner understands that it is not strictly true, the owner assumes that the cost of fuel and the number of customers are independent. Contribution Margin per Service Call (Price - Variable cost) $ 30 20 12 Scenario Excellent Fair Poor In addition to the variable costs of service, the owner estimates that other posts are $47,000 plus $8 for each service call in excess of…
Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed at a flat rate for each service, and most costs of providing the service are the same, given the similarity in the lawns and lots. The owner budgets income by estimating two factors that fluctuate with the economy: the contribution margin associated with each service call and the number of customers who will request lawn service. Looking at next year, the owner develops the following estimates of contribution margin (price less variable cost of the service, including labor) and the estimated number of service calls. Although the owner understands that it is not strictly true, the owner assumes that the cost of fuel and the number of customers are independent. Contribution Margin per Service Call (Price - Scenario Excellent Fair Poor Excellent Fair Poor Excellent In addition to the variable costs of service, the owner estimates that other costs are $49,000 plus $8 for each service call in excess…
Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed at a flat rate for each service, and most costs of providing the service are the same, given the similarity in the lawns and lots. The owner budgets income by estimating two factors that fluctuate with the economy: the contribution margin associated with each service call and the number of customers who will request lawn service. Looking at next year, the owner develops the following estimates of contribution margin (price less variable cost of the service, including labor) and the estimated number of service calls. Although the owner understands that it is not strictly true, the owner assumes that the cost of fuel and the number of customers are independent. Contribution Margin per Service Coll Scenario Excellent Fair Poor (Price - Number of Variable cost) Service Calls $40 Excellent 30 12 In addition to the variable costs of service, the owner estimates that other costs are $59,000 plus $8 for…
Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed at a flat rate for each service, and most costs of providing the service are the same, given the similarity in the lawns and lots. The owner budgets income by estimating two factors that fluctuate with the economy: the contribution margin associated with each service call and the number of customers who will request lawn service. Looking at next year, the owner develops the following estimates of contribution margin (price less variable cost of the service, including labor) and the estimated number of service calls. Although the owner understands that it is not strictly true, the owner assumes that the cost of fuel and the number of customers are independent. Contribution Margin per Service Call Scenario Excellent Fair Poor (Price - $ 50 Variable cost) Service Calls 40 12 Number of 10,950 8,500 6,200 In addition to the variable costs of service, the owner estimates that other costs are $63,000…
Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed at a flat rate for each service, and most costs of providing the service are the same, given the similarity in the lawns and lots. The owner budgets income by estimating two factors that fluctuate with the economy: the contribution margin associated with each service call and the number of customers who will request lawn service. Looking at next year, the owner develops the following estimates of contribution margin (price less variable cost of the service, including labor) and the estimated number of service calls. Although the owner understands that it is not strictly true, the owner assumes that the cost of fuel and the number of customers are independent. Contribution Margin per Service Call (Price - Variable cost) $ 50 40 12 Scenario Excellent Fair Poor In addition to the variable costs of service, the owner estimates that other costs are $65,000 plus $8 for each service call in excess of…
Tommy’s Tile Service is planning on purchasing new tile cleaning equipment that will improve their ability to remove tough stains from ceramic tiles. The company’s contribution margin is 25% and its current break-even point is $409,200 in sales revenue. Purchasing the new equipment will increase fixed costs by $9,500. Required: 1. Determine the company’s current fixed costs. 2. Determine the company’s new break-even point in sales. 3. After the purchase of the equipment, how much revenue does the company need to generate a profit of $120,000?
Gardendale Associates offers landscape consultations, where they provide design advice and plans to residential customers. A single consultation is priced at $750.00. The variable costs of a consultation total $330.00 consisting mostly of labor and supplies. Annual fixed costs are $102,900. Gardendale Associates is subject to an Income tax rate of 24 percent. Required: a. What total revenue does Gardendale have to generate from selling consultations to break even? b. What total revenue does Gardendale have to generate from selling consultations to earn an annual operating profit of $106,400 after taxes? Break-even revenue Required revenue