Green Thumb operates a commercial plant nursery where it propagates plants for garden centers throughout the region. GreenThumb has 33.5 millicn in assets. Its yearfy fixed costs are $470,000, and the variable costs for the potting soll, container, label, seeding, and labor for each gallon-sized plant total $1.60, Greenthumb's volume is currently 500,000 units. Competitors offer the same quality plants to garden centers for $3.30 each. Garden centers then mark them up to soll to the public for 58 to 511 . depending on the type of plant. Read the tequirements. Requirement 1. GreenThumb owners want to earn a 13\% retum on the company's assets. What is GreenThumb's target full cost? Calculate the target full cost for GreenThumb. Select the formula labeis and enter the amounts. Requirement 2. Gtven GreenThumb's current costs, will its owners be able to achieve their target profit? Show your analysis. Calculate Green Thumb's current total full cost. Select the formula labels and enter the amounts. Requirements 1. GreenThumb owners want to earn a 13% retum on the company's assets. What is GreenThumb's target full cost? 2. Given GreenThumb's current costs, will its owners be ablo to achieve their target profit? Show your analysis. 3. Assume that GreenThumb has identified ways to cut its variable costs to $1.45 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company to achiove its target profit? Show your analysis. 4. GreenThumb started an aggressive advertising campaign strategy to diferentiate its plants from those grown by other nurseries. GreenThumb doesn't expect volume to be affected, but it hopes to gain more control over pricing. If GreenThumb has to spend $40.000 this year to advertise and its variable costs continue to be $1.45 per unit, what will its cost-plus price be? Do you think GreenThumb will be able to soll its plants to garden centers at the cost-plus price? Why or why not? Requirement 1. GreenThumb owners want to eam a 13\% retum on the company's assets. What is GreenThumb's target full cost? Caiculate the target full cost for GreenThumb. Select the formula labels and enter the amounts. Requirement 2. Given GreenThumb's current costs, will its owners be able to achieve their targot profit? Show your analysis. Calculate GreenThumb's current total full cost. Select the formula labels and enter the amounts. Green Thumb's current total full costs of is Its target fulil cost. Green Thumb GreenThumb operates a commercial plant nursery where it propagates plants for garden centers throughout the region. GreenThumb has $3.5 million in assets. its yearly GreenThumb's current total full costs of is its target full cost. GreenThumb meot the owner's profit expectations. Requirement 3. Assume that GreenThumb has identifed ways to cut its varlable costs to $1.45 per unit. What is its new target fixed cost? Wilt this decrease in varlable oosts allow the company to achieve its target profit? Show your analysis. The new target fixed cost is By reducing variable costs to $1.45, GreenThumb bo able to achieve its target profit without having to take any other cost cutting measures. Requirement 4. GreenThumb started an aggressive advortising campaign strategy to differentiate its plants from those grown by other nurseries. GreenThumb doesnt expect volume to be aflected, but it hopes to gain more control over pricing. If GreenThumb has to spend $40,000 this yoar to advertise and is variable costs continue fo be $1.45 per unit, what will its cost-plus price be? Do you think GreenThumb will be able to sel 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) Requirement 4. GreenThumb started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. GreenThumb doesn't expect volume to be affected, but it hopes to gain more control over pricing. If GreenThumb has to spend $40,000 this year to advertise and its variable coets continue to be \$1.45 per unit, what will its cost-plus price be? Do you think GroenThumb 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.) Consumers wil be more willing to pay the cost-plus price if the marketing campaign is Otherwise GreenThumb may be considered a
