Elizabeth and William are considering offering a doggy day-care service. After some research, they found several pet day-carefacilities in their area, but they were expensive! Further, the facilities were sterile and didn't provide a "homey" or fun environment forpets. Elizabeth and William felt they could easily fix these shortcomings.Elizabeth's home would be the location for their business, since it already has a fenced-in yard and is located two blocks from a dogpark. 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 costsHourly wage for hired labor; planned for only 200 hours per yearVariable costs for foodEstimated volume of dogs per day (open for business 5 days per week, 50weeks per year; average length of stay 8 hours per day)$600per year$700per year$16 per hour$16per day per dog.24 per day (b)* Your answer is incorrect.Assume that the company employs a target costing approach and that the going rate for doggy day care is $10 per hour. What isthe target cost per dog hour if the two friends require a 25% return on their invested assets, which total $624,000 (includingElizabeth's home)? (Round answer to 2 decimal places, e.g. 15.25.)Target cost per dog hourEstimated cost per dog hourTarget cost per dog hour $1016.215per dog hourHow 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, eg. 15.256.)per dog hourper dog hour

Decision regarding pricing of a product or service requires an in-depth analysis regarding the…

Answered: Elizabeth and William are considering…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Most people, economists included, consider child labor to be morally unacceptable and would support aggressive efforts to eliminate such practices-including shutting out imported products made with such labor. Which of the following is true? Select the correct answer below: child workers will have to go back to school and improve their skills eliminating such practices may not be a good solution as workers may have even less attractive alternative jobs, perhaps scavenging garbage or prostitution O such practices will make it possible for children to not be exploited O governments will have to step up their financial aid to needy families so children will not have to work
1) Suppose you work for Meijer, a large grocer headquartered in Michigan. 20 years ago, Meijer bought a parcel of land on the outskirts of Lafayette, Indiana. It is currently being rented to a farmer. They intended to build a new store on the lot after a proposed new highway was complete. However, when the new highway was built it went in a different direction and now they must decide whether to build the new store. You ask around and find the following information from the following departments (all numbers are in thousands of dollars): The sales department tells you: Annual Revenue: The operations department tells you: Inventory Required on Shelves: Annual Cost of Goods Sold: Annual Cost of Running Store: Annual Allocated Overhead from HQ: The forecasting department tells you: Loan to fund construction: Interest Rate: Weighted Average Cost of Capital: Depreciation Schedule: Tax Rate: $2400 Current Market Value of Land: Current Pre-Tax Income from renting land out: Cost of…
Godo
Darren Mack owns the "Gas n' Go" convenience store and gas station. After hearing a marketing lecture, he realizes that it might be possible to draw more customers to his high-margin convenience store by selling his gasoline at a lower price. However, the "Gas n' Go' is unable to qualify for volume discounts on its gasoline purchases, and therefore cannot sell gasoline for profit if the price is lowered. Each new pump will cost $95,000 to install, but will increase customer traffic in the store by 13,000 customers per year. Also, because the "Gas n' Go" would be selling its gasoline at no profit, Darren plans on increasing the profit margin on convenience store items incrementally over the next five years. Assume a discount rate of 8 percent. The projected convenience store sales per customer and the projected profit margin for the next five years are given in the table below. i Year 1 23 $5 $5.50 $7 $9 $11 a. What is the NPV of the next five years of cash flows if Darren had four new…
Pamela recently moved to Celebration, Florida, an unincorporated master-planned community in Osceola County that connects directly to the Walt Disney World parks. To support the planned community's environmentally friendly transit system and to save on transportation costs, she wants to buy a new Neighborhood Electric Vehicle (NEV). She is looking into three models of the NEVs and has been provided with the information below. Compare the alternatives shown and determine which model should be purchased if Pamela's personal MARR is 8% per year. Initial costs Dynasty Might-E Zenn $13,000 $13,550 $14,000 Annual expenses $4,781 $5,281 $6,081 Annual savings $6,781 $7,581 $7,581 Salvage value $1,300 $1,600 $2,000 Life (years) 10 10 10 10 IRR 9.64% 11.93% 3.36%
Dog
A country club wants to exam the effects of a new marketing campaign that attempts to get more people within the community to become members. In many communities, when people buy a house in the area, they receive a “Welcome Wagon” gift basket containing coupons to local restaurants. The idea of the marketing campaign is to include a free two month membership to the country club in the gift basket with the hope that once “new” residents try the country club then at least a certain proportion will want to become real members. One member of the Club’s Executive Council believes that at least 81% of the people who receive the coupons for the free membership will use the coupon. In a sample of 192 new residents who received the coupon for the two month free membership, there were 138 people who actually took advantage of the free two month membership. When testing the hypothesis that at least 81% of the people that receive the coupon actually use it, what is the test statistic?
Your friend, Julia, owns a corner store in your neighborhood. She purchases fresh milk from a nearby farm and sells them in her store. Cost of the milk is $5 per case, and each case can be sold for $6 per case. Since the milk does not go through rigorous treatment, it should be sold within a week. Any milk that is not sold during the week can be sold back to the farm for $2 per case. Based on the historical, she identified the following probability distribution of the demand. Weekly Demand (cases) Probability 16 0.05 17 0.15 18 0.35 19 0.25 20 0.2 One of the reasons why people come to her store is the availability of fresh milk, and those customers typically make other purchases along with fresh milk. She believes there will be a loss of such sales if she is not able to have enough fresh milk in the store, and estimates this loss to be $2 per case. Julia needs some help to determine how many cases of fresh milk she needs to order for the coming…
Marsha’s Pet Store employs six employees. Their duties are to sell pets, replenish the stock, keep the pets’ cages clean, feed the pets, and maintain good records. Marsha pays a fixed hourly rate and a commission on sales of pets. Lately, Marsha has been finding that the records have not been well maintained and the stock has not been replenished. However, pet sales are good and the pets’ cages are clean. Is Marsha’s current reward structure motivating the employees to pay more attention to the pets than to their other duties? multiple choice True False

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS