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Please complete all parts of the problem with explanations if possible. Thank you. P25-22A (similar to) Question Help O Green Place operates a commercial plant
Please complete all parts of the problem with explanations if possible. Thank you.
P25-22A (similar to) Question Help O Green Place operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Green Place has $5,300,000 in assets. Its yearly fixed costs are $625,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-size plant total $1.70. Green Place's volume is currently 490,000 units. Competitors offer the same plants, at the same quality, to garden centers for $4.00 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. Green Place's owners want to earn a 10% return on investment on the company's assets. What is Green Place's target full product cost? Less: Target full product cost Choose from any list or enter any number in the input fields and then click Check Answer. parts b remaining Clear All Check Answer A Requirements 1. Green Place's owners want to earn a 10% return on investment on the company's assets. What is Green Place's target full product cost? 2. Given Green Place's current costs, will its owners be able to achieve their target profit? 3. Assume Green Place has identified ways to cut its variable costs to $1.55 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company to achieve its target profit? 4. Green Place started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Green Place does not expect volume to be affected, but it hopes to gain more control over pricing. If Green Place has to spend $155,000 this year to advertise and its variable costs continue to be $1.55 per unit, what will its cost-plus price be? Do you think Green Place will be able to sell its plants to garden centers at the cost-plus price? Why or why not? Print DoneStep by Step Solution
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