Garden House operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Garden House has $4.4 million in assets. Its yearly fixed costs are $580,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-sized plant total $1.15. Garden House's volume is currently 480,000 units. Competitors offer the same quality plants to garden centers for $3.40 each. Garden centers then mark them up to sell to the public for $8 to $9, depending on the type of plant. Read the requirements. Requirement 1. Garden House's owners want to earn a 13% return on the company's assets. What is Garden House's target full cost? Calculate the target full cost for Garden House. Select the formula labels and enter the amounts. Target full cost Requirement 2. Given Garden House's current costs, will its owners be able to achieve their target profit? Show your analysis. Calculate Garden House's current total full cost. Select the formula labels and enter the amounts. Total full cost Garden House's current total full cost its target full cost. Garden House v meet the owner's profit expectations. Requirement 3. Assume that Garden House has identified ways to cut its variable costs to $1.00 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company to achieve its target profit? Show your analysis. Target full cost Less: Reduced level of variable costs New target fixed costs The new target fixed cost is V. By reducing variable costs to $1.00, Garden House be able to achieve its target profit without having to take any other cost cutting measures. Requirement 4. Garden House started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Garden House doesn't expect volume to be affected, but it hopes to gain more control over pricing. If Garden House has to spend $120,000 this year to advertise and its variable costs continue to be $1.00 per unit, what will its cost-plus price be? Do you think Garden House will be able to sell its plants to garden centers at the cost-plus price? Why or why not? Determine its cost-plus price. (Round the cost-plus price to the nearest cent.) Plus: Plus: Target revenue Divided by: Cost-plus price per unit Consumers will be more willing to pay the cost-plus price if the marketing campaign is V. Otherwise Garden House may be considered a nursery. Garden House operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Garden House has $4.4 million in assets. Its yearly fixed costs are $580,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-sized plant total $1.15. Garden House's volume is currently 480,000 units. Competitors offer the same quality plants to garden centers for $3.40 each. Garden centers then mark them up to sell to the public for $8 to $9, depending on the type of plant. Read the requirements. Requirement 1. Garden House's owners want to earn a 13% return on the company's assets. What is Garden House's target full cost? Calculate the target full cost for Garden House. Select the formula labels and enter the amounts. Target full cost Requirement 2. Given Garden House's current costs, will its owners be able to achieve their target profit? Show your analysis. Calculate Garden House's current total full cost. Select the formula labels and enter the amounts. Total full cost Garden House's current total full cost its target full cost. Garden House v meet the owner's profit expectations. Requirement 3. Assume that Garden House has identified ways to cut its variable costs to $1.00 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company to achieve its target profit? Show your analysis. Target full cost Less: Reduced level of variable costs New target fixed costs The new target fixed cost is V. By reducing variable costs to $1.00, Garden House be able to achieve its target profit without having to take any other cost cutting measures. Requirement 4. Garden House started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Garden House doesn't expect volume to be affected, but it hopes to gain more control over pricing. If Garden House has to spend $120,000 this year to advertise and its variable costs continue to be $1.00 per unit, what will its cost-plus price be? Do you think Garden House will be able to sell its plants to garden centers at the cost-plus price? Why or why not? Determine its cost-plus price. (Round the cost-plus price to the nearest cent.) Plus: Plus: Target revenue Divided by: Cost-plus price per unit Consumers will be more willing to pay the cost-plus price if the marketing campaign is V. Otherwise Garden House may be considered a nursery