Carol and Steven 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. Carol and Steven felt they could easily fix these shortcomings.

Carol'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$)$

$$400$ per year

$$800$ per year

$$15$ per hour

$$16$ per day per dog

$16$ per day

$($b$)$

Assume that the company employs a target costing approach and that the going rate for doggy day care is $$11$ per

hour. What is the target cost per dog hour if the two friends require a $25\%$ return on their invested assets, which

total $$544,000($including Carol's home$)?($Round target cost per dog hour to $2$ decimal places, e$.$g$.$

$15\mathrm{.}25$ and estimated cost per dog hour to $3$ decimal places, e$.$g$.15\mathrm{.}256.)$

How 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 answer to $2$ decimal places, e$.$g$.15\mathrm{.}25.)$