Question

INSTRUCTIONS: Determine the per unit cost for each dog. Fill in the blanks to get the per unit cost and fixed cost of each service. Based on 5 grooms per day GROOMING Item Variable Costs Item Fixed Costs 1.37 Shampoo Clipper(s) Bowls Towels Scissors ou Groomer Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw Total Fixed Costs 30.95 20.00 28.57 3.95 2.08 2.36 200.00 2,367.91 Total Variable Costs $ 9.97 $ Based on 22 dogs per day for six days a week. Assume 25 operating days for kennel and 22 eight-hour work days for kennel attendan DAY CARE Item Variable Costs Item Fixed Costs Day care attendant 2.88 Rent 232.14 Toys 0.27 Loan 150.00 Bowls 0.10 Utilities and Insurance Towels 1.40 Depreciation on heating system 29.64 Cleaning Products: Odoban 15.59 Cleaning Products: Simple Green 16.78 Draw 200.00 Total Variable Costs Total Fixed Costs $ 858.44 Fixed Costs 80.00 386.90 250.00 Based on 12 dogs per day. Assume 22 eight-hour work days for kennel attendant. BOARDING Item Variable Costs Item Kennel attendant Depreciation on kennels Bowls 0.86 Rent Towels 0.87 Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw Total Variable Costs Total Fixed Costs 49.40 25.98 29.55 200.00 7.35 7.35 1,378.97

Answer 1

Contribution Margin Analysis

D Based on 5 grooms per day GROOMING 1tem. Variable Cost Shampoo 1.04 Clipper Bowls 0-72 Towels Seimess 101 Total Variable C $9.97 1-37 5.83 them Fired laste Groomer 2080.01 Rent 30.95 Loan 20.00 utilities & Ine 28.57 Deps 3.95 Cleaning Asaduet _208 n Luisplegreer 2:36 200 Draw Total Fixed cost & 2367.91 2.88 PAYCARE Day Care attendant Toys Bowls Towels 1V.cout 0.27 0.10 1:40 34.74 $_232.14 · 150 314.29) 29.64 Rent Loan utilities & Ini Depti cip odoban " Simple green saw - Pf cost 15-59 16-78 20000 $ 858.44 IT BOARDING 386-90 Kennel attendant $ 4562) Bowls 0.86 Jowele 0.87 Fcost Depreciata $ 80.00 Rent Loan 250.00 Utilitin 8ins (357.14) Deprecial 49.40 Cleaneria:ndahan 25.98 " S. Green 29.55 Draw 200.00 Totad tested c. $ 1378.97 Ti Variable cost $ 7.35 _

Variable cost per unit comes from your Variable_Fixed tab completed in Milestone 1.

SCENARIO (choose one from each category):

Dog Day Care

1. With pricing at $18 per dog per day, you can expect to have 22 dogs per day.

2. With pricing at $20 per dog per day, you can expect to have 15 dogs per day.

3. With pricing at $25 per dog per day, you can expect to have 10 dogs per day.

Overnight Boarding

1. With pricing at $25 per dog per day, you can expect to have 12 dogs per day.

2. With pricing at $28 per dog per day, you can expect to have 10 dogs per day.

3. With pricing at $30 per dog per day, you can expect to have 7 dogs per day.

Basic Groom

1. With pricing at $25 per dog per day, you can expect to have 5 dogs per day.

2. With pricing at $30 per dog per day, you can expect to have 4 dogs per day.

3. With pricing at $35 per dog per day, you can expect to have 3 dogs per day.

DAY CARE BOARDING GROOMING

Sales Price $ 20.00 $ 25.00 $ 35.00

Variable Cost per Unit 4.74 7.35 9.97

Contribution Margin $ 15.26 $ 17.65 $25.03 0

2. DAY CARE BOARDING GROOMING

Sales Price $ 20.00 $ 25.00 $ 35.00

Fixed Costs $ 858.44 $ 1,378.97 $ 2,367.92

Contribution Margin $ 15.26 $ 17.65 $ 25.03

Break-Even Units (round up) 56 78 95

Target Profit $ 417.00 $ 583.00 $ 1,000.00

Break-Even Units (round up) 56 78 95

Target Profit $ 667.00 $ 909.00 $ 1,500.00

Break-Even Units (round up) 56 78 95

3. Income Statement

For the Month Ended January 31, xxxx

Revenue:

Grooming $ 3,325

Day Care 1,120

Boarding 1,950

Total Revenue $ 6,395

Cost of Goods Sold * $ 11,040

Gross Profit $ (4,645)

Expenses:

G&A Salaries $ 1,200

Advertising $ 100

Cleaning Products $ 120

Depreciation $ 83

Rent $ 650

Loan $ 420

Utilities and Insurance $ 600

Total Expenses $ 3,173

Net Income / Loss $ (7,818)

* Cost of Goods Sold = Cost of Services (COS)