Chapter 22 Assignment

Instructions:

1. Download the attached document and identify it with your name.

2. Complete the exercise, save and send it as an attachment in the Ch. 22 Assignment.

1) All That Blooms performs environmentally friendly lawn services for homeowners. Its operating cost are as follows.

Depreciation $1,400 per month

Advertising $200 per month

Insurance $2,000 per month

Weed and feed materials $12 per lawn

Direct labor $10 per lawn

Fuel $2 per lawn

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 =

(b) dollars.=

2) Kare Kars provides shuttle service between four hotels near a medical center and an international airport. Kare Kars uses two 10-passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below.

Fare revenues (1,440 fares) $36,000

Variable costs

Fuel $5,040

Tolls and parking $3,100

Maintenance $860 $9,000

Contribution margin $27,000

Fixed cost

Salaries $12,700

Depreciation $1,300

Insurance $1,000 $15,000

Net income $12,000

Instructions:

(a) Calculate the break-even point in

(1) Dollar's

2) Number of fares

(b) Determine the contribution margin at the break-even point.

Your answers will be accepted only in Word format as an attachment.