Save Green Thumb operates a commercial plant nursery where it propagates plants garden centers throughout the region. Green Thumb has $4.9 million in assets. Its yearly fixed costs are $682,000, and the variable costs for the potting soil, the public for $9 to $11, depending on the type of plant. container, label, seedling, and labor for each gallon-sized plant total $1.30. Green Thumb's volume is currently 480,000 units. Competitors offer the same quality plants to garden centers for $4.00 each. Garden centers then mark them up to sell to Read the requirements Requirement 1. Green Thumb owners want to eam a 14% return on the company's assets. What is GreenThumb's target full cost? Calculate the target full cost for Green Thumb Select the formula labels and enter the amounts. Revenue at current market price $ 1.920,000 Less: Desired profit 686,000 I Target full cost S 1.234,000 Requirement 2. Given Green Thumb's current costs, will its owners be able to achieve their target profit? Show your analysis. Calculate Green Thumb's current total full cost. Select the formula labels and enter the amounts Current fixed costs $ 682,000 Current variable costs 624,000 S Total full cost 1,306,000 Green Thumb's current total full costs of S 1,306,000 is higher than its target full cost. GreenThumb will not meet the owner's profit expectations Requirement 3. Assume that Green Thumb has identified ways to cut its variable costs to $1.15 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. Choose from any list or enter any number in the input fields and then click Check Answer Homework: Chapter GreenThumb operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Green Thumb has $4.9 million in assets. Its yearly fixed costs are $682,000, and the variable costs for the potting soll, container, label, seedling, and labor for each gallon-sized plant total $1.30. Green Thumb's volume is currently 480,000 units. Competitors offer the same quality plants to garden centers for $400 each. Garden centers then mark them up to sell t the public for $9 to $11, depending on the type of plant. Read the requirements : Target full cost $ 1.234,000 Less: Reduced level of variable costs 552.000 $ 682,000 New target fixed costs The new target fixed cost is the same as actual fixed costs. By reducing variable costs to $1.15, Green Thumb will be able to achieve its target profit without having to take any other cost cutting measures Requirement 4. GreenThumb started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Green Thumb doesn't expect volume to be affected, but it hopes to gain more control over pricinu Groen Thumb has to spend $110,400 this year to advertise and its variable costs continue to be $1.15 per unit, what will w or why not? - X Determine its cost-plus price. (Round the cost-plus price to the nearest cent.) Requirements Total variable costs S 552.000 Plus: Additional fixed costs 1. Green Thumb owners want to earn a 14% return on the company's assets. What is Green Thumb's target full cost? Current fixed costs 2. Given Green Thumb's current costs, will its owners be able to achieve their target profit? Show Total full costs your analysis 3. Assume that GreenThumb has identified ways to cut its variable costs to $1.15 per unit. What Plus 686.000 Desired profit is its new target fixed cost? Will this decrease in variable costs allow the company to achieve Target revenue s 2,030,400 its target profit? Show your analysis 480,000 4. Green Thumb started an aggressive advertising campaign strategy to differentiate its plants Divided by: Number of units from those grown by other nurseries. Green Thumb doesn't expect volume to be affected, but it wie nie na 422 hopes to gain more control over pricing. If Green Thumb has to spend $110,400 this year to advertise and its variable costs continue to be $1.15 per unit, what will its cost-plus price be? Choose from any list or enter any number in the input fields and then click Check Answer. Do you think Green Thumb will be able to sell its plants to garden centers at the cost-plus price? Why or why not? Video Help Me Solve This Get More Help
