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babymother [125]
4 years ago
13

Greenjeans & Co. presently provides a weekly maintenance service to 140 homes. Variable costs per customer amount to approxi

mately $10 per week for labor, mileage, and supplies. Fixed costs are approximately $12,000 per quarter. Customers pay $270 per quarter for the weekly service. All contracts are written for one quarter. (There are 13 weeks in one quarter.) How many customers are required to break even?
Business
1 answer:
Oliga [24]4 years ago
5 0

Answer:

86 customers per quarter

Explanation:

Given,

Per quarter = 13 weeks

Fixed Cost = $12,000 per quarter

Variable cost = $10 per week x 13 weeks = $130 per quarter

Selling cost = $270 per quarter

We know,

Break-even point = \frac{Fixed Cost}{Selling Cost - Variable Cost}

Putting the value in the formula,

Break-even point = \frac{12,000}{270 - 130}

Break-even point = 85.71 or 86 customers per quarter.

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