Patterson Paints makes and sells paint to home improvement stores. Patterson's only plant can produce up to 13 million cans of paint per year. Current annual production is 10 million cans Fixed manufacturing, selling, and administrative costs total $20 million per year. The variable cost of making and selling each can of paint is $5.50. Stockholders expect a 20% annual retum on the company's $42 million of assets Read the requirements. Requirement 1. What is Patterson's current total cost of making and seling 10 million cans of paint? What is the current cost per can of paint? Select the formula labels and enter the amounts to calculate Patterson's current total cost and current cost per can of paint. (Enter currency amounts in dotars, not in millions. Enter unt values as whole numbers, not in millions. Round all currency amounts to the nearest whole dollar and round the cost per unit to the nearest cent, SXXX) Plus Divided by: Total cost per unit Requirement 2. Assume that Patterson is a price-taker and the current wholesale market price is $8.00 per can of paint. What is the target total of cost in producing and seling 10 million cans of paint? Given Patterson's current total costs, will the company reach stockholders' profit goals? Begin by calculating Patterson's target total cost. Select the formula labels and enter the amounts. (Enter currency amounts in dollars, not in millions. Round all currency amounts to the nearest whole dollar.) Less: Target total cost Given Patterson's current total costs, will the company reach stockholders' profit goals? (Enter currency amounts in dollars, not in milions.) the company reach stockholders' profit goals. There will be a(an) the company reach stockholders' profit goals. There will be ajan) Requirement 3. Continuing with Requirement 2, let's say that Patterson has found ways to reduce its total fixed costs by $500,000. What is the target variable cost per can of paint? Select the formula labels and enter the amounts to calculate Patterson's target variable cost per can of paint. (Enter currency amounts in dollars, not in millions. Enter unit values as whole numbers not in millions. Round cost per unit amounts to the nearest cent, $XXX) Less Divided by: Requirement 4. Suppose Patterson plans to spend an additional $4.5 million on advertising to differentiate its product in order to increase sales volume to 12 milion cans and become more of a price-setter. Assume that Patterson did reduce its total fixed costs by $500,000 as stated in Requirement 3 but could not find ways to save on its variable costs. What is the cost-plus price for a can of paint under these conditions? Select the formula labels and enter the amounts to calculate Patterson's cost-plus price for a can of paint under these conditions. (Enter currency amounts in dollars, not in millions. Round cost per unit amounts to the nearest cent, SX.XX) Current total costs Plus: Divided by Cost-plus price per unit Requirements 1. What is Patterson's current total cost of making and selling 10 million cans of paint? What is the current cost per can of paint? 2. Assume that Patterson is a price-taker and the current wholesale market price is $8.00 per can of paint. What is the target total of cost in producing and selling 10 million cans of paint? Given Patterson's current total costs, will the company reach stockholders' profit goals? 3. Continuing with Requirement 2, let's say that Patterson has found ways to reduce its total fixed costs by $500,000. What is the target variable cost per can of paint? 4. Suppose Patterson plans to spend an additional $4.5 million on advertising to differentiate its product in order to increase sales volume to 12 million cans and become more of a price-setter. Assume that Patterson did reduce its total fixed costs by $500,000 as stated in Requirement 3 but could not find ways to save on its variable costs. What is the cost-plus price for a can of paint under these conditions? Print Done - X