E$14-25.$ Developing an Equation from Average Costs

Tucker Pup's Pet Resort offers dog boarding services in Chicago. Assume that in March, when dog$-$days occupancy was at an annual low of $150$ days, the average cost per dog$-$day was $$65.$ In July, when dog$-$days were at a capacity level of $600,$ the average cost per dog$-$day was $$20.$

REQUIRED

a$.$ Develop an equation for monthly operating costs.

b$.$ Determine the average boarding cost per dog$-$day at an annual volume of $4,500$ dog$-$days.

E$14-26.$ Pricing Products

Referring to E$14-25$ to answer the following questions.

REQUIRED

a$.$ What is the minimum price for boarding services where the company would not be worse off?

b$.$ What factors would you consider in setting a price for boarding services?