Requirements

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?

Given Green Place's current costs, will its owners be able to achieve their target profit?

Assume Green Place has identified ways to cut its variable costs to $$1\mathrm{.}25$ per unit. What is its new

target fixed cost? Will this decrease in variable costs allow the company to achieve its target profit?

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 $$80,000$ this year to advertise and its variable

costs continue to be $$1\mathrm{.}25$ 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?