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PetSmart, Inc. is a large specialty pet retailer of services and solutions for the needs of pets. In addition to selling pet food and
PetSmart, Inc. is a large specialty pet retailer of services and solutions for the needs of pets. In addition to selling pet food and pet products, PetSmart also offers dog grooming services including bath, nail trim, teeth brushing, aromatherapy to reduce everyday stress, and nail polish and stickers. PetSmart even offers a Top Dog service that includes a premium shampoo, milk bath conditioner, scented cologne spritz, teeth brushing, and bandana or bow. Assume PetSmart, Inc. expects to incur $380,000 of indirect costs this year. The company allocates indirect costs based on the following activities: (Click the icon to view the data.) Read the requirements Requirement 1. Calculate the predetermined overhead allocation rate for each activity. (Abbreviation used: qty quantity. Round your answers to the nearest cent XXX.) Admissions Cleaning Grooming Data table Estimated Estimated Quantity of Predetermined OH allocation rate Estimated. Estimated Activity Cost Admission S Allocation Base 60,000 Number of admissions Quantity of Allocation Base 20,000 Cleaning Grooming 240,000 80,000 Cleaning direct labor hours 100,000 Grooming direct labor hours 4,000 S Total indirect costs 380,000 - X Requirements 1. Calculate the predetermined overhead allocation rate for each activity. 2. Assume a customer brought in Sophie, a beagle, for Top Dog service. PetSmart used the following resources: Allocation Base Number of admissions Cleaning direct labor hours Grooming direct labor hours Sophie, Beagle 1 1 0.5 Determine the total cost of the Top Dog service for Sophie assuming the total direct materials cost was $3.50 and the total direct labor cost was $12 per DLHr. 3. If PetSmart desires a 30% target operating income after covering all its costs, what would PetSmart have to charge the customer to achieve that operating income? Read the requirements. Requirement 1. Calculate the predetermined overhead allocation rate for each activity. (Abbreviation used: qty quantity. Round your X.XX.) Admissions Cleaning Grooming Actual overhead costs Actual qty of the allocation base used Estimated overhead costs Estimated qty of the allocation base Predetermined OH allocation rate
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