Requirement 1: Expected Selling Price of Nursery = 53,90,000 (490000*11)
Less Desired Profit from Selling it = 63,00,000 (5,25,00,000*12/100)
Target Full Cost = 9,10,000
Requirement 2: Plant City’s Total Full Cost
Variable Cost = $588000 (1.2 x 490000)
Fixed Cost = $ 668500
Total full Cost = $1256500
Plant City’s current total fixed cost of $1256500 is $910000 its target full cost. Plant City $346500 meet the owners’ profit expectation.
Requirement 3: New Target Fixed Cost
Target Full Cost = $910000
Less: Reduced level of variable cost = $73500 (0.15 (1.20-1.05)*490000)
New Target Fixed Cost = $ 836500
By reducing variable cost to $1.05 Plant City is able to achieve its target profits without having to taking any other cost cutting measures
Requirement 4 : Determine Cost Plus Price
Fixed Cost = $668500
Plus Variable Cost = $514500(1.05*490000)
Plus Additional Cost of Advertisement = $53900
Total Target Revenue = $ 1236900
Divided By = 490000
Cost plus Price per unit = $2.52
Plant City operates a commercial plant nursery where it propagates plants for garden centers throughout the...
Garden House operates a commercial plant nursery where it propagates plants for garden centers throughout the region Garden House has $3.5 million in assets. Its yearly fixed costs are $470,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-sized plant total $160. Garden House's volume is currently 500,000 units. Competitors offer the same quality plants to garden centers for $3.30 each Garden Centers then mark them up to sell to the public for...
Nature Place operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Nature Place has $6 million in assets. Its yearly fixed costs are $900,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-sized plant total $1.15. Nature Place's volume is currently 600,000 units. Competitors offer the same quality plants to garden centers for $3.90 each. Garden centers then mark them up to sell to the public for...
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(L.OBJ. 2) Making special order and pricing decisions [15-20 min] Garden House operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Garden House has $5,000,000 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. Garden House's vol- ume is currently 500,000 units. Competitors offer the same plants, at the same qual- ity, to garden centers for...
ates a commercial plant nursery where it propagates plants tor garden centers Garden Away opera and the variable costs for the poting soil container, label, seedling, and quality plants to garden centers for $3.70 each Garden centers then mark them up to sel to the public for $8 10 $10 Away has $5,25 milion in assets. Its yearly fxed costs are $668,500. labor for each gallon-sized plant total $1 20. Garden Away's volume is 490,000 unts, Competitors offer the same...
Positive rating given upon completion thank you! Garden House operates a commercial plant nursery where it propagates plants for garden centers throughout the region. Garden House 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. Garden House'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...
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