Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden...

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Accounting

Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $25.0 per hour for each type of service, but lawn maintenance has higher variable costs ($15.0 per hour) than garden maintenance ($7.5 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, 8,000 hours of lawn maintenance services and 2,000 hours of garden maintenance were provided:
Lawn
Maintenance Per
Hour Garden
Maintenance Per
Hour Total
Sales $ 200,000 $ 25.0 $ 50,000 $ 25.0 $ 250,000
Variable expenses 120,00015.015,0007.5135,000
Contribution margin $ 80,000 $ 10.0 $ 35,000 $ 17.5115,000
Fixed expenses 32,200
Operating income $ 82,800
Required:
1. Compute the overall CM ratio for the company.
2. Compute the overall break-even point for the company in sales dollars.
3. Compute the weighted-average CM per hour for the company. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
4. Calculate the overall break-even point for the company in hours.
5. At the overall break-even point in total hours, how many hours of each service must be provided for the company to break-even?
6. Calculate the overall sales in dollars required to earn an after-tax profit of $76,160 if the tax rate is 30%.

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