Nature's House operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Nature's 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. Nature's 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 $9 to $12, depending on the type of plant. Read the requirements. Requirements Requirement 1. Nature's House owners want to earn a 13% return on the company's assets. What is Nature's House's target full cost? Calculate the target full cost for Nature's House. Select the formula labels and enter the amounts. Less: Target full cost Requirement 2. Given Nature's House's current costs, will its owners be able to achieve their target profit? Show your analysis. 1. Nature's House owners want to earn a 13% return on the company's assets. What is Nature's House's target full cost? 2. Given Nature's House's current costs, will its owners be able to achieve their target profit? Show your analysis. 3. Assume that Nature's 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. 4. Nature's House started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Nature's House doesn't expect volume to be affected, but it hopes to gain more control over pricing. If Nature's 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 Nature's House will be able to sell its plants to garden centers at the cost-plus price? Why or why not? Calculate Nature's House's current total full cost. Select the formula labels and enter the amounts. Total full cost is its target full cost. Nature's House Nature's House's current total full costs of $ meet the owner's profit expectations. Print Done Requirement 3. Assume that Nature's 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 By reducing variable costs to $1.00, Nature's House be able to achieve its target profit without having to take any other cost cutting measures. Requirement 4. Nature's House started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Nature's House doesn't expect volume to be affected, but it hopes to gain more control over pricing. If Nature's 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 Nature's 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 Otherwise Nature's House may be considered a nursery. Choose from any list or enter any number in the input fields and then continue to the next