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ABC Gardening operates a commercial plant nursery where it propagates plants for garden centers throughout the region. ABC Gardening has $$5\mathrm{.}8$ million in assets. Its yearly fixed costs are $$742,000,$ and the variable costs for the potting soil, container, label, seedling, and labor for each gallon$-$sized plant total $$1\mathrm{.}55.$ ABC Gardening's volume is currently $575,000$ units. Competitors offer the same quality plants to garden centers for $$3\mathrm{.}80$ each. Garden centers then mark them up to sell to the public for $$9$ to $$12,$ depending on the type of plant.

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Requirement $1.$ ABC Gardening owners want to earn an $11\%$ return on the company's assets. What is ABC Gardening's target full cost?

Calculate the target full cost for ABC Gardening. Select the formula labels and enter the amounts.

$$

Less: $$

Target full cost $$

Requirement $2.$ Given ABC Gardening's current costs, will its owners be able to achieve their target profit? Show your analysis.

Calculate ABC Gardening's current total full cost. Select the formula labels and enter the amounts.

$$ Total full cost $$

ABC Gardening's current total full costs of $$ is $$ its target full cost. ABC Gardening meet the owner's profit expectations.

Requirement $3.$ Assume that ABC Gardening has identified ways to cut its variable costs to $$1,40$ per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company it achieve its target profit? Show your analysis.

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