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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)
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 + $3x y = $0 + $13x y = $10,200+ $1x Milo, the owner, has determined that direct labor is the cost driver for all three categories of costs. (a) Your answer is partially correct. Prepare a flexible budget for activity levels of 530, 570, and 680 direct labor hours. (List variable costs before fixed costs.) Activity Level RENSING GROOMERS Flexible Budget Direct Labor Hours 510 Variable Costs 590 660 Grooming Supplies 1530 1770 1980 Direct Labor Overhead 6630 7670 8580 510 590 660 Total Variable Costs 8670 10030 11220 Fixed Costs Overhead 10400 10400 10400 Total Fixed Costs 10400 10400 10400 Total Costs 19070 20430 21620
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