Nature Place operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Nature Place 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. Nature Place'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 $9 to $11, depending on the type of plant. hts Read the tequirements. Requirement 1. Nature Place owners want to eam a 14% return on the company's assets. What is Nature Place's target full cost? ve Calculate the target full cost for Nature Place. Select the formula labels and enter the amounts. Less: Target full cost Requirement 2. Given Nature Place's current costs, will its owners be able to achieve their target profit? Show your analysis. Calculate Nature Place's current total full cost. Select the formula labels and enter the amounts. Total full cost Nature Place's current total full costs of $ its target full cost. Nature Place at demenfit naatatiam Requirement 3. Assume that Nature Place has identified ways to cut its variable costs to $1.00 per unit. What is its new target foxed 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 without having to take any other cost cutting measures. V. By reducing variable costs to $1.00, Nature Place V be able to achieve its target profit Choose from any list or enter any number in the input fields and then continue to the next question. Requirement 4. Nature Place started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Nature Place doesn't expect volume to be affected, but it hopes to gain more control over pricing. If Nature Place has to spend $72,000 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 Nature Place 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: Read the pegurements rive Pus: Target revenue Divided by Cost plus prioe per unit Consumers will be more willing to pay the cost-plus price if the marketing campaign is Oherwise Nature Place may be considered a nursery
