Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Rensing Groomers is in the dog-grooming business. Its operating costs are described by the following formulas: Grooming supplies (variable) Direct labor (variable) Overhead (mixed) y
Rensing Groomers is in the dog-grooming business. Its operating costs are described by the following formulas: Grooming supplies (variable) Direct labor (variable) Overhead (mixed) y = $0 + $4x y = $0 +$14x y = $10,300+ $2x Milo, the owner, has determined that direct labor is the cost driver for all three categories of costs. Activity Level Direct Labor Hours Variable Costs Flexible Budget 530 560 680 Grooming Supplies 2120 i 2240 i 2720 i Direct Labor Overhead 7420 i 7840 i 9520 i 1060 i 1120 i 1360 i otal Variable Costs 10600 i 11200 i 13600 i Fixed Costs Overhead 10300 i 10300 i 10300 i otal Fixed Costs 10300 i 10300 i 10300 i otal Costs 20900 i 21500 i 23900 i (c) & (d) (c) Calculate the total cost per direct labor hour at each of the activity levels specified in part (a). (Round answers to 2 decimal places, e.g. 10.25.) Activity level 1 $ Activity level 2 $ Activity level 3 $ (d) The groomers at Rensing normally work a total of 650 direct labor hours during each month. Each grooming job normally takes a groomer 1.30 hours. Milo wants to earn a profit equal to 35% of the costs incurred. Determine what he should charge each pet owner for grooming. (Round answer to 2 decimal places, e.g. 10.25.) Charge per client $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started