Question
Rensing Groomers is in the dog-grooming business. Its operating costs are described by the following formulas: Grooming supplies (variable)y=$0 + $3x Direct labor (variable)y=$0 +
Rensing Groomers is in the dog-grooming business. Its operating costs are described by the following formulas:
Grooming supplies (variable)y=$0 + $3x
Direct labor (variable)y=$0 + $12x
Overhead (mixed)y=$10,600+ $2x
Milo, the owner, has determined that direct labor is the cost driver for all three categories of costs.
1st question :I need a flexible budget for activity levels of550,590, and680direct labor hours.
2nd question:I need the total cost per unit at each of the activity levels specified in part a for activity level 1, activity level 2, and activity level 3.
3rd question:Lastly the groomers at rensing normally work a total of 650 direct labors during each month. Each grooming lab normally takes a groomer 1.30 hours. Milo wants to earn a profit equal to 40 percent of the costs incurred. What is the direct charge per client that he should charge each pet owner for grooming?
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