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Garden House operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Garden House has $4,800,000 in assets. Its yearly fixed costs are $600,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-size plant total $1.25. Garden House's volume is currently 480,000 units. Competitors offer the same plants, at the same quality, to garden centers for $3.50 each. Garden centers then mark them up to sell to the public for $9 to $12, depending on the type of plant. Read the requirements. Requirement 1. Garden House's owners want to earn an 11% return on investment on the company's assets. What is Garden House's target full product cost? Less: Target full product cost Requirement 2. Given Garden House's current costs, will its owners be able to achieve their target profit? Begin by calculating Garden House's current full product cost. Plus: Current full product cost Garden House's current full product costs are its target full product cost, therefore Garden House be able to acheive its target profit.Requirement 3. Assume Garden House has identified ways to cut its variable costs to $1.10 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company to achieve its target profit? Begin by calculating Garden House's new target fixed cost. Less: Target fixed cost Will this decrease in variable costs allow the company to achieve its target profit? Since the company's actual fixed costs are the new target fixed cost amount, 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 does not expect volume to be affected, but it hopes to gain more control over pricing. If Garden House has to spend $135,000 this year to advertise and its variable costs continue to be $1.10 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? Begin by calculating the cost-plus price per unit. (Round your answer to the nearest cent.) Plus: Full product cost Plus: Target revenue Divided by: Cost-plus price per unit Do you think Garden House will be able to sell its plants to garden centers at the cost-plus price? Why or why not? If the advertising campaign is effective, Garden House be able to sell its plants to garden centers at this price because it is than the $3.50 that Garden House previously charged. Choose from any list or enter any number in the input fields and then continue to the next question.0 Requirements L\" -X Garden House's owners want to earn an 11% return on investment on the company's assets. What is Garden House's target full product cost? Given Garden House's current costs. will its owners be able to achieve their target prot? Assume Garden House has identied ways to cut its variable costs to $1.10 per unit. What is its new target xed cost? Will this decrease in variable costs allow the company to achieve its target prot? Garden House started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Garden House does not expect volume to be affected, but it hopes to gain more control over pricing. If Garden House has to spend $135,000 this year to advertise and its variable costs continue to be $1.10 per unitI 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
