Q1) Garden House controls a commercial plant where it circulates plants for garden centres all through the region. Garden House has= $5,000,000 in assets. Its yearly fixed cost is= $625,000 and = variable costs for = potting soil, container, label, seedling, and labour for each gallon size plant total $1.70. Garden House's volume is presently 500,000 units. Garden House offers = plants to garden centres for $4.00 each. Garden canters then mark them up to sell to = public for $8 to $10, depending on kind of plant.
a) Garden House's owners desire to earn 12% return on company's assets. Determine Garden House's target profit?
b) Given Garden House's present costs, will its owners be able to attain their target profit?
c) Determine the per unit variable cost for Garden House to attain its target profit?