Jason is a recent graduate from Kwantlen Polytechnic University horticulture program. Jason's father has a good sized
Question:
Jason is a recent graduate from Kwantlen Polytechnic University horticulture program. Jason's father has a good sized greenhouse building in his yard that is available 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 on the related cost of these factors and believes 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 $0.20 for each bell pepper he produces. Water and electricity use are expected to cost $0.10 per bell pepper. He thinks he can produce a maximum of 3,000 bell peppers every month with the size of the greenhouse he is planning to set up.
The local market for bell peppers is $4.20 per pack of 3 bell peppers. He anticipates he may have to price down each pack and sell his peppers for $3 per pack ($1 for each bell pepper) to be able to compete with the big retailers.
1. How many bell peppers does Jason need to produce to cover his expenses? How did you calculate this?
2. What are Jason's objectives from this business? Would this business meet his needs?
3. If not, what accounting / business recommendations could you make to have this business meet Jason's needs?
Concepts In Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher