Question: Forever Green Plastics manufactures garden tool sets for cultivating. Total fixed costs are estimated at $64,800. The variable cost per set is $2.95 and the selling price is $8.60. What is the break-even point?
A. 12,000
B. 12,876
C. 11,469
D.
Question: Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $6 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to
Answer: This relates to decision making where ONLY relevant costs are considered.
1. Cost of land is sunk cost and not relevant
2. If the company goes ahead with building the plant it will lose rental revenue, which is an opportunity cost.
3. If the company
in the US, and the tool had become a ubiquitous gardening implement. After failing to sell his invention to the major manufacturers, Dyson set up ...
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