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If the company employs a cost-plus markup of 30%, assuming the original volume of 28 dogs per day, what will be the selling price per dog hour? (Round answer to 2 decimal places, e.g. 15.25.) Selling price /dog hour

If the company employs a cost-plus markup of 30%, assuming the original volume of 28 dogs per day, what will be the selling price per dog hour? (Round answer to 2 decimal places, e.g. 15.25.) Selling price /dog hour

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Debra and Gary 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. Debra and Gary felt they could easily fix these shortcomings. (c) Debra'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 200 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) Target cost per dog hour Assume that the company employs a target costing approach and that the going rate for doggy day care is $9 per hour. What is the target cost per dog hour if the two friends require a 25% return on their invested assets, which total $616,000 (including Debra's home)? (Round answer to 2 decimal places, eg. 15.25.) Estimated cost per dog hour Target cost per dog hour $ Show Transcribed Text 6.25 per dog hour How would the target cost and estimated cost per dog hour change if a more accurate estimate of volume is just 9 dogs per day? (Round target cost per dog hour to 2 decimal places, eg. 15.25 and estimated cost per dog hour to 3 decimal places, e.g. 15.256) Selling price $ 2.125 per dog hour $500 per year $800 per year $16 per hour $15 per day per dog 044 per dog hour /dog hour 28 per day If the company employs a cost-plus markup of 30%, assuming the original volume of 28 dogs per day, what will be the selling price per dog hour? (Round answer to 2 decimal places, e.g. 15.25.)
Transcribed Image Text:Debra and Gary 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. Debra and Gary felt they could easily fix these shortcomings. (c) Debra'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 200 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) Target cost per dog hour Assume that the company employs a target costing approach and that the going rate for doggy day care is $9 per hour. What is the target cost per dog hour if the two friends require a 25% return on their invested assets, which total $616,000 (including Debra's home)? (Round answer to 2 decimal places, eg. 15.25.) Estimated cost per dog hour Target cost per dog hour $ Show Transcribed Text 6.25 per dog hour How would the target cost and estimated cost per dog hour change if a more accurate estimate of volume is just 9 dogs per day? (Round target cost per dog hour to 2 decimal places, eg. 15.25 and estimated cost per dog hour to 3 decimal places, e.g. 15.256) Selling price $ 2.125 per dog hour $500 per year $800 per year $16 per hour $15 per day per dog 044 per dog hour /dog hour 28 per day If the company employs a cost-plus markup of 30%, assuming the original volume of 28 dogs per day, what will be the selling price per dog hour? (Round answer to 2 decimal places, e.g. 15.25.)
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