Plant City operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Plant City has $5.8 million in assets. Its yearly fixed costs are $742,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-sized plant total $1.55. Plant City's volume is currently 575,000 units. Competitors offer the same quality plants to garden centers for $3.80 each. Garden centers then mark them up to sell to the public for $9 to $12, depending on the type of plant. Read the Requirement 1. Plant City owners want to earn an 11% return on the company's assets. What is Plant City's target full cost? Calculate the target full cost for Plant City. Select the formula labels and enter the amounts. Less: Target full cost Requirement 2. Given Plant City's current costs, will its owners be able to achieve their target profit? Show your analysis. Calculate Plant City's current total full cost. Select the formula labels and enter the amounts. Requirement 3. Assume that Plant City has identified ways to cut its variable costs to $1.40 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. The new target fixed cost is By reducing variable costs to $1.40, Plant City be able to achieve its target profit without having to take any other cost cutting measures. Requirement 4. Plant City started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Plant City doesn't expect volume to be affected, but it hopes to gain more control over pricing. If Plant City has to spend $57,500 this year to advertise and its variable costs continue to be $1.40 per unit, what will its cost-plus price be? Do you think Plant City will be able to sell its plants to garden centers at the cost-plus price? Why or why not? Consumers will be more willing to pay the cost-plus price if the marketing campaign is Otherwise Plant City may be considered a nursery