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Verterra Nurseries, located in Wellington County, Ontario, Canada, has been in business since 1945, providing a large variety of locally grown plants, bulbs, flowers, trees and shrubs. In the early years, they operated only seasonally. Still, as the business expanded and costs increased, they needed to branch out into other goods and services that would make their business profitable 12 months of the year. Over the past 70 years, their business has grown to 25 stores across Canada. They also operate a Gift Shop selling garden supplies and accessories and seasonal giftware. In November and December, they operate their Indoor Christmas Extravaganza offering a large selection of seasonal plants, Christmas trees and decorations. This winter, they are planning a new landscape design and construction service scheduled to be available in the summer of 2021. Initially, they will offer a basic 12' x 12 composite deck along with a 12' x 12' fully enclosed sunroom. Verterra Nurseries is currently reviewing the pricing for three of their best-selling items and finalizing pricing for the new landscape services. The table below shows the costs, markups, margins, and discounts used for their product offerings' pricing and discount structures. Introduction Growth Maturity Decline Operating expenses (OE) % of COGS 75% 45% 25% 15% Markup 210% 150% Gross Profit Margin (GPM) 4.596 2596 Introduction Growth Maturity Decline Operating expenses (OE) % of COGS 75% 45% 25% 15% Markup 210% 150% Gross Profit Margin 45% 25% (GPM) Rate of Markdown 20% 25% 40% 45% Best-Selling Products 12 x 12 Enclosed 6-pack Flowering Spring Assorted Garden Large Clay Planter 12 x 12 Composite Deck Sunroom Bulbs Gnomes PLC: Growth PLC: Maturity PLC: Decline PLC: Introduction PLC: Introduction Question 2 (1 point) Determine the operating profit (OP) when the 12x12 composite deck has a cost of $1,600. Your Answer: Answer units

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