The twig stands are more popular, so Bobby sells four twig stands for every one oak stand. Katie charges her husband $400 to share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Bobby need to sell to breakeven? Will this affect the number of scarves Katie needs to sell to breakeven? Explain. Bobby Arthur 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. Bobby 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, Bobby has to purchase wood to make his oak plant stands. His unit prices and costs are as follows: E(Click the icon to view the data.) Determine how many of each plant stand Bobby 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. Twig Oak Total Sale price per unit 16.00 $ 43.00 X Data Table Variable cost per unit 3.00 15.00 Less: Contribution margin per unit 13.00 28.00 Sales mix 5 4 Twig Stands Oak Stands Contribution margin 80.00 52.00 $ 28.00 $ Sales price. $ $ 16.00 43.00 Weighted average contribution margin per unit 16.00 Variable cost $ $ 3.00 15.00 Next determine the formula to compute the breakeven sales in units. (Abbreviations used: Avg. average and CM = contribution margin.) Print Done Fixed expenses Operating income Weighed-avg. CM per unit Breakeven sales in units + Determine how many of each plant stands Bobby needs to sell to breakeven. units Breakeven sales of twig stands is Breakeven sales of oak stands is units.
The twig stands are more popular, so Bobby sells four twig stands for every one oak stand. Katie charges her husband $400 to share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Bobby need to sell to breakeven? Will this affect the number of scarves Katie needs to sell to breakeven? Explain. Bobby Arthur 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. Bobby 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, Bobby has to purchase wood to make his oak plant stands. His unit prices and costs are as follows: E(Click the icon to view the data.) Determine how many of each plant stand Bobby 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. Twig Oak Total Sale price per unit 16.00 $ 43.00 X Data Table Variable cost per unit 3.00 15.00 Less: Contribution margin per unit 13.00 28.00 Sales mix 5 4 Twig Stands Oak Stands Contribution margin 80.00 52.00 $ 28.00 $ Sales price. $ $ 16.00 43.00 Weighted average contribution margin per unit 16.00 Variable cost $ $ 3.00 15.00 Next determine the formula to compute the breakeven sales in units. (Abbreviations used: Avg. average and CM = contribution margin.) Print Done Fixed expenses Operating income Weighed-avg. CM per unit Breakeven sales in units + Determine how many of each plant stands Bobby needs to sell to breakeven. units Breakeven sales of twig stands is Breakeven sales of oak stands is units.
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 1TP: Seda Sarkisian makes wedding cakes from her home. A customer has requested two duplicate wedding...
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Transcribed Image Text:The twig stands are more popular, so Bobby sells four twig stands for every one oak stand. Katie charges her husband $400 to share her booth
at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Bobby need to sell to breakeven? Will this
affect the number of scarves Katie needs to sell to breakeven? Explain.
Bobby Arthur 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. Bobby 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, Bobby has to purchase wood to make his oak plant stands. His unit prices and costs are as follows:
E(Click the icon to view the data.)
Determine how many of each plant stand Bobby 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.
Twig
Oak
Total
Sale price per unit
16.00 $
43.00
X
Data Table
Variable cost per unit
3.00
15.00
Less:
Contribution margin per unit
13.00
28.00
Sales mix
5
4
Twig Stands
Oak Stands
Contribution margin
80.00
52.00 $
28.00 $
Sales price.
$
$
16.00
43.00
Weighted average contribution margin per unit
16.00
Variable cost
$
$
3.00
15.00
Next determine the formula to compute the breakeven sales in units. (Abbreviations used: Avg.
average and CM = contribution margin.)
Print
Done
Fixed expenses
Operating income
Weighed-avg. CM per unit
Breakeven sales in units
+
Determine how many of each plant stands Bobby needs to sell to breakeven.
units
Breakeven sales of twig stands is
Breakeven sales of oak stands is
units.
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