Jason is a recent graduate from the Kwantlen Polytechnic University's (KPU) horticulture program. Jason is planning...

 

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Jason is a recent graduate from the Kwantlen Polytechnic University's (KPU) horticulture program. Jason is planning to start a business producing vegetables, in particular bell peppers. Jason's father has a good-sized greenhouse In his yard which is avallable for Jason to rent. His father requires $550 per month for the use of his greenhouse. Three important factors in greenhouse growing are lighting, temperature, and humidity. Jason has conducted research an beleves they can be managed by upgrading the greenhouse at a cost of $450 per month. In addition, he will need to purchase seeds, fertilizer, net pots, clay pebbles, and some other supplies. Jason estimates that the cost for all the necessary supplies will be 20 cents for each bell pepper he produces. Water and electricity use are expected to cost 10 cents per bell pepper. He thinks he can produce a maximum of 3000 bell peppers every month. Jason can sell his peppers for $3 per pack ($1 for each bell pepper). a) For Jason's greenhouse growing business, graph the following cost-volume-profit relationships and determine the break-even point, using both the formula and the graph. b) if variable costs increase to $0.40 for each pepper what is the new break-even point in units? c) What would be the resulting profit if the material cost remains at the original $0.30, the rental cost is decreased to $300, and he sold 3000 peppers? Jason is a recent graduate from the Kwantlen Polytechnic University's (KPU) horticulture program. Jason is planning to start a business producing vegetables, in particular bell peppers. Jason's father has a good-sized greenhouse In his yard which is avallable for Jason to rent. His father requires $550 per month for the use of his greenhouse. Three important factors in greenhouse growing are lighting, temperature, and humidity. Jason has conducted research an beleves they can be managed by upgrading the greenhouse at a cost of $450 per month. In addition, he will need to purchase seeds, fertilizer, net pots, clay pebbles, and some other supplies. Jason estimates that the cost for all the necessary supplies will be 20 cents for each bell pepper he produces. Water and electricity use are expected to cost 10 cents per bell pepper. He thinks he can produce a maximum of 3000 bell peppers every month. Jason can sell his peppers for $3 per pack ($1 for each bell pepper). a) For Jason's greenhouse growing business, graph the following cost-volume-profit relationships and determine the break-even point, using both the formula and the graph. b) if variable costs increase to $0.40 for each pepper what is the new break-even point in units? c) What would be the resulting profit if the material cost remains at the original $0.30, the rental cost is decreased to $300, and he sold 3000 peppers?

Answer rating: 100% (QA)

Fixed vosts Rent 550 Upgradation of green house 450 So total fixed cos... View the full answer