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Garden House operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Garden House has $6 million in assets. Its

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Garden House operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Garden House has $6 million in assets. Its yearly fixed costs are $900,000, 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 600,000 units. Competitors offer the same quality plants to garden centers for $3.90 each. Garden centers then mark them up to sell to the public for $8 to $10, depending on the type of plant. Read the requirements. Requirement 1. Garden House owners want to earn a 14% 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. Less Target full cost Requirement 2. Given Garden House's current costs. vill its owners be able to achieve their target profit? Show your analysis. Calculate Gard en House's cur rrent total full cost. Select the fo rmula labels and enter the amounts Total full cost Garden House's current total full costs of s is s target full cost. Garden House meet the owner's profit expectations. Requirement 3. Assume that Garden House has identified ways to cut its variable costs to $1.0 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. 0 Target full cost Less: Reduced level of variable costs New target fixed costs The new target fixed cost is Y. By reducing variable costs to $1.00, Garden House Y be able to achieve its target profit without having to take any other cost cutting measures

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