Bill Pope Has Developed a New Device That Is So

question 90

Essay

Bill Pope has developed a new device that is so exciting he is considering quitting his job in order to produce and market it on a large-scale basis.Bill will rent a garage for $300 per month for production purposes.Utilities will cost $40 per month.Bill has already taken an industrial design course at the local community college to help prepare for this venture.The course cost $300.Bill will rent production equipment at a monthly cost of $800.He estimates the material cost will be $5 per unit,and the labour cost will be $3 per unit.He will hire workers and spend his time promoting the product.To do this,he will quit his job,which pays $3,000 per month.Advertising and promotion will cost $900 per month.
Required:
Complete the chart below by placing an "X" under each heading that helps to identify the cost involved.You can place an "X" under more than one heading for a single cost: for example,a cost may be a sunk cost,an overhead cost,and a product cost; you would place an "X" under each of these headings opposite the cost.
* Between the alternatives of going into business to make the device or not going into business to make the device.See columnheading "Differential Cost".
$\begin{array}{|l|l|l|l|l|l|l|l|l|}\hline& \begin{array}{l}\text { Opportunity }\\\text { Cost }\end{array} & \begin{array}{l}\text { Sunk } \\\text { Cost }\end{array} & \begin{array}{l}\text { Variable } \\\text { Cost }\end{array} & \begin{array}{l}\text { Fixed } \\\text { Cost }\end{array} & \begin{array}{l}\text { Mfg. } \\\text { Overhead }\end{array} & \begin{array}{l}\text { Product } \\\text { Cost }\end{array} & \begin{array}{l}\text { Selling } \\\text { Cost }\end{array} & \begin{array}{l}\text { Differential } \\\text { Cost }\end{array} \\\hline \text { Garage rent } \\\hline \text { Utilities } \\\hline \text { Cost of the }\\\text { industrial }\\\text { design course }\\\hline\text { Equipment }\\\text { rented }\\\hline \text { Material cost } \\\hline \text { Labour cost } \\\hline \text { Present salary } \\\hline \text { Advertising } \\\hline\end{array}$

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Definitions:

Groupthink

A mental occurrence happening among individuals in a group, where the preference for unity or agreement leads to unwise or ineffective outcomes in decisions.

Evaluative Comments

Feedback or remarks aimed at assessing the quality, effectiveness, or value of something, often used for improvement or decision-making purposes.

Structured Meeting

A meeting organized and conducted in a systematic manner, with a clearly defined agenda, objectives, and expected outcomes to ensure productivity and efficiency.

Groupthink

An occurrence in a societal group where the need for consensus or adaptation creates outcomes of decision-making that are unreasonable or ineffective.