Curtis Parker admired his wife's success at selling scarves at local crafts shows, so he decided to make two types of plant stands to sell at the shows. Curtis makes twig stands out of downed wood from his backyard and the yards of his neighbors, 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: Twig Stands Oak Stands Sales price. . . . . . . . . . . . . $13.00 $30.00 Variable cost. . . . . . . . . . . $2.50 $7.00 The twig stands are more popular, so Curtis sells four twig stands for every one oak stand. Jennifer charges her husband $455 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 breakeven? Will this affect the number of scarves Jennifer needs to sell to breakeven? Explain.
Curtis Parker admired his wife's success at selling scarves at local crafts shows, so he decided to make two types of plant stands to sell at the shows. Curtis makes twig stands out of downed wood from his backyard and the yards of his neighbors, 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: Twig Stands Oak Stands Sales price. . . . . . . . . . . . . $13.00 $30.00 Variable cost. . . . . . . . . . . $2.50 $7.00 The twig stands are more popular, so Curtis sells four twig stands for every one oak stand. Jennifer charges her husband $455 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 breakeven? Will this affect the number of scarves Jennifer needs to sell to breakeven? Explain.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...
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Curtis Parker admired his wife's success at selling scarves at local crafts shows, so he decided to make two types of plant stands to sell at the shows. Curtis makes twig stands out of downed wood from his backyard and the yards of his neighbors, 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:
|
|
Twig Stands
|
Oak Stands
|
|---|---|---|
|
Sales price. . . . . . . . . . . . .
|
$13.00
|
$30.00
|
|
Variable cost. . . . . . . . . . .
|
$2.50
|
$7.00
|
The twig stands are more popular, so Curtis sells four twig stands for every one oak stand. Jennifer charges her husband $455 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 breakeven? Will this affect the number of scarves Jennifer needs to sell to breakeven? Explain.
NOTE:the second picture is to show is options for the first picture.
Transcribed Image Text:Determine how many of each plant stand Curtis needs to sell to breakeven. Begin by computing the weighted-average contribution margin per unit. First identify the formula labels, then complete the calculations step by step.
Less:
Weighted average contribution margin per unit
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