COMPUTE THE CONTRIBUTION MARGIN BASED ON EACH SERVICE

Grooming Day Care Boarding

Sales Price

Variable Cost Per Unit

Contribution Margin

Total Variable costs for:

Grooming $9.97

Day Care $4.74

Boarding $7.36

? Basic Groom

o With pricing at $25 per groom, you can expect to do 5 grooms per day.

o With pricing at $30 per groom, you can expect to do 4 grooms per day.

o With pricing at $35 per groom, you can expect to do 3 grooms per day.

? Dog Day Care

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

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

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

? Overnight Boarding

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

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

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

Additionally, you need to compare your break-even points for the following target profits for each area of your business:

? Day Care o Break-even

o $417 target profit each month

o $667 target profit each month

? Boarding o Break-even

o $583 target profit each month

o $909 target profit each month

? Grooming o Break-even

o $1,000 target profit each month

o $1,500 target profit each month

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