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Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $15 per hour for each type of service, but lawn maintenance has higher variable costs ($7 per hour) than garden maintenance ($3 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, 6,000 hours of lawn maintenance services and 2,000 hours of garden maintenance were provided: Lawn Maintenance Per Hour Per Garden Hour Maintenance Total Sales Variable expenses.... Contribution margin.... Fixed expenses.. Operating income..... $90,000 42000 $48.000 $30,000 6,000 $24.000 $120,000 48,000 72,000 54000 $ 18,000 $15 $6 $8 $12

Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $15 per hour for each type of service, but lawn maintenance has higher variable costs ($7 per hour) than garden maintenance ($3 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, 6,000 hours of lawn maintenance services and 2,000 hours of garden maintenance were provided: Lawn Maintenance Per Hour Per Garden Hour Maintenance Total Sales Variable expenses.... Contribution margin.... Fixed expenses.. Operating income..... $90,000 42000 $48.000 $30,000 6,000 $24.000 $120,000 48,000 72,000 54000 $ 18,000 $15 $6 $8 $12

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...
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What value in sales dollars for lawn maintenance is expected at the break even point?

Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $15 per hour for each type of service, but lawn maintenance has higher variable costs ($7 per hour) than garden maintenance ($3 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, 6,000 hours of lawn maintenance services and 2,000 hours of garden maintenance were provided: Per Per Hour Garden Lawn Maintenance Maintenance Hour Total Sales... Variable expenses.. Contribution margin... Fiked expenses . Operating income.... $120,000 48,000 72,000 54000 $ 18,000 $90,000 42,000 $30,000 6,000 $24,000 $15 $5 $48,000 $8 $12
Transcribed Image Text:Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $15 per hour for each type of service, but lawn maintenance has higher variable costs ($7 per hour) than garden maintenance ($3 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, 6,000 hours of lawn maintenance services and 2,000 hours of garden maintenance were provided: Per Per Hour Garden Lawn Maintenance Maintenance Hour Total Sales... Variable expenses.. Contribution margin... Fiked expenses . Operating income.... $120,000 48,000 72,000 54000 $ 18,000 $90,000 42,000 $30,000 6,000 $24,000 $15 $5 $48,000 $8 $12
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