Garden Company has the capacity to produce 200,000 tillers. Variable costs are $30 per tiller. Fixed costs are $1,500,000. Should the company aim to sell 200,000 at $100 each, 160,000 at $125 each, or 125,000 at $160 each? Explain your recommendation. What will the company have to do to carry out the strategy you recommend?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
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Garden Company has the capacity to produce 200,000 tillers.
Variable costs are $30 per tiller. Fixed costs are $1,500,000. Should
the company aim to sell 200,000 at $100 each, 160,000 at $125
each, or 125,000 at $160 each? Explain your recommendation. What
will the company have to do to carry out the strategy you
recommend?
Transcribed Image Text:Garden Company has the capacity to produce 200,000 tillers. Variable costs are $30 per tiller. Fixed costs are $1,500,000. Should the company aim to sell 200,000 at $100 each, 160,000 at $125 each, or 125,000 at $160 each? Explain your recommendation. What will the company have to do to carry out the strategy you recommend?
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