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Susan 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. Susan and Gary felt they could easily fix these shortcomings. Susan'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 190 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) (b) Target cost per dog hour Estimated cost per dog hour 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 $540,000 (including Susan's home)? (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.) Target cost per dog hour $ $ eTextbook and Media $ per dog hour per dog hour $600 $700 per year per year $14 per hour $15 per day per dog How would the target cost and estimated cost per dog hour change if a more accurate estimate of volume is just 7 dogs per day? (Round answer to 2 decimal places, e.g. 15.25.) per dog hour 30 per day

Susan 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. Susan and Gary felt they could easily fix these shortcomings. Susan'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 190 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) (b) Target cost per dog hour Estimated cost per dog hour 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 $540,000 (including Susan's home)? (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.) Target cost per dog hour $ $ eTextbook and Media $ per dog hour per dog hour $600 $700 per year per year $14 per hour $15 per day per dog How would the target cost and estimated cost per dog hour change if a more accurate estimate of volume is just 7 dogs per day? (Round answer to 2 decimal places, e.g. 15.25.) per dog hour 30 per day

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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Susan 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. Susan and Gary felt they could easily fix these shortcomings. Susan'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 190 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) (b) Target cost per dog hour 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 $540,000 (including Susan's home)? (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.) Estimated cost per dog hour Target cost per dog hour eTextbook and Media Save for Later $ $ $ per dog hour How would the target cost and estimated cost per dog hour change if a more accurate estimate of volume is just 7 dogs per day? (Round answer to 2 decimal places, e.g. 15.25.) per dog hour $600 per year $700 per year $14 per hour $15 per day per dog 30 per day per dog hour Attempts: 0 of 3 used Submit Answer
Transcribed Image Text:Susan 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. Susan and Gary felt they could easily fix these shortcomings. Susan'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 190 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) (b) Target cost per dog hour 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 $540,000 (including Susan's home)? (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.) Estimated cost per dog hour Target cost per dog hour eTextbook and Media Save for Later $ $ $ per dog hour How would the target cost and estimated cost per dog hour change if a more accurate estimate of volume is just 7 dogs per day? (Round answer to 2 decimal places, e.g. 15.25.) per dog hour $600 per year $700 per year $14 per hour $15 per day per dog 30 per day per dog hour Attempts: 0 of 3 used Submit Answer
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