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Plant City operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Plant City has $6.85 million in assets. Its yearly fixed costs are $584,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-sized plant total $1.65. Plant City's volume is currently 470,000 units. Competitors offer the same quality plants to garden centers for $4.20 each. Garden centers then mark them up to sell to the public for $9 to $11, depending on the type of plant. Read the imate Requirements x Requir cost? Calculd Less: Target Requir 1. Plant City owners want to earn a 10% return on the company's assets. What is Plant City's target full cost? 2. Given Plant City's current costs, will its owners be able to achieve their target profit? Show your analysis. 3. Assume that Plant City has identified ways to cut its variable costs to $1.50 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. 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 $94,000 this year to advertise and its variable costs continue to be $1.50 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? lysis. Calculd Total Plant Print meet Done Requirement 3. Assume that Plant City has identified ways to cut its variable costs to $1.50 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 continue to the next question. public for S9 $11, depending on the type of plant. Read the requirements Requirement 1. Plant City owners want to eam a 10% 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. Total full cost Plant City's current total full costs of $ its target full cost. Plant City meet the owner's profit expectations. Requirement 3. Assume that Plant City has identified ways to cut its variable costs to $1.50 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, Target full cost Choose from any list or enter any number in the input fields and then continue to the next question. ? Requirement 3. Assume that Plant City has identified ways to cut its variable costs to $1.50 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. Target full cost Less: Reduced level of variable costs New target fixed costs The new target fixed cost is By reducing variable costs to $1.50, 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 $94,000 this year to advertise and its variable costs continue to be $1.50 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? Determine its cost-plus price. (Round the cost-plus price to the nearest cent.) Plus: Dhe Choose from any list or enter any number in the input fields and then continue to the next question. 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 $94,000 this year to advertise and its variable costs continue to be $1.50 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? Determine its cost-plus price. (Round the cost-plus price to the nearest cent.) Plus: Plus: Target revenue Divided by: Cost-plus price per unit Consumers will be more willing to pay the cost-plus price if the marketing campaign is may be considered a nursery Otherwise Plant City Choose from any list or enter any number in the input fields and then continue to the next

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