Betty and Mark are considering offering a doggy day-care service. After some research, they found several...
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Betty and Mark are considering offering a doggy day-care service. After some research, they found several pet day-care facilities in their area, but they were expensive! Further, the facilities were sterile and didn't provide a "homey" or fun environment for pets. Betty and Mark felt they could easily fix these shortcomings. Betty's home would be the location for their business, since it already has a fenced-in yard and is located two blocks from a dog park. Estimated costs for building an outdoor shelter, plus other licensing and business start-up costs, are as follows. Shelter (depreciated over 7 years) Licensing and other annual costs Hourly wage for hired labor; planned for only 210 hours per year Variable costs for food Estimated volume of dogs per day (open for business 5 days per week, 50 weeks per year; average length of stay 8 hours per day) $500 per year $700 per year $14 per hour $16 per day per dog 23 per day (b) Assume that the company employs a target costing approach and that the going rate for doggy day care is $10 per hour. What is the target cost per dog hour if the two friends require a 25% return on their invested assets, which total $644,000 (including Betty's home)? (Round answer to 2 decimal places, e.g. 15.25.) Target cost per dog hour (c). Estimated cost per dog hour Target cost per dog hour eTextbook and Media How would the target cost and estimated cost per dog hour change if a more accurate estimate of volume is just 10 dogs per day? (Round target cost per dog hour to 2 decimal places, e.g. 15.25 and estimated cost per dog hour to 3 decimal places, e.g. 15.256.) Save for Later Selling price $ eTextbook and Media $ $ Save for Later $ per dog hour per dog hour If the company employs a cost-plus markup of 30%, assuming the original volume of 23 dogs per day, what will be the selling price per dog hour? (Round answer to 2 decimal places, e.g. 15.25.) /dog hour per dog hour Attempts: 0 of 3 used Submit Answer Attempts: 0 of 3 used Submit Answer Betty and Mark are considering offering a doggy day-care service. After some research, they found several pet day-care facilities in their area, but they were expensive! Further, the facilities were sterile and didn't provide a "homey" or fun environment for pets. Betty and Mark felt they could easily fix these shortcomings. Betty's home would be the location for their business, since it already has a fenced-in yard and is located two blocks from a dog park. Estimated costs for building an outdoor shelter, plus other licensing and business start-up costs, are as follows. Shelter (depreciated over 7 years) Licensing and other annual costs Hourly wage for hired labor; planned for only 210 hours per year Variable costs for food Estimated volume of dogs per day (open for business 5 days per week, 50 weeks per year; average length of stay 8 hours per day) $500 per year $700 per year $14 per hour $16 per day per dog 23 per day (b) Assume that the company employs a target costing approach and that the going rate for doggy day care is $10 per hour. What is the target cost per dog hour if the two friends require a 25% return on their invested assets, which total $644,000 (including Betty's home)? (Round answer to 2 decimal places, e.g. 15.25.) Target cost per dog hour (c). Estimated cost per dog hour Target cost per dog hour eTextbook and Media How would the target cost and estimated cost per dog hour change if a more accurate estimate of volume is just 10 dogs per day? (Round target cost per dog hour to 2 decimal places, e.g. 15.25 and estimated cost per dog hour to 3 decimal places, e.g. 15.256.) Save for Later Selling price $ eTextbook and Media $ $ Save for Later $ per dog hour per dog hour If the company employs a cost-plus markup of 30%, assuming the original volume of 23 dogs per day, what will be the selling price per dog hour? (Round answer to 2 decimal places, e.g. 15.25.) /dog hour per dog hour Attempts: 0 of 3 used Submit Answer Attempts: 0 of 3 used Submit Answer
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Fixed Costs These are the costs that do not change with the volume of dogs They include the shelter and licensing costs which total 500 700 1200 per y... View the full answer
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Accounting Information Systems basic concepts and current issues
ISBN: 978-0078025334
3rd edition
Authors: Robert Hurt
Posted Date:
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