Required:

1. determine the number of units PP would need to break even on a yearly basis. 2. To become profitable Mindy has suggested that the price per booking be increased to $35. Determine the number of booking units PP would need to break even on a yearly basis under this scenario.

QUESTION 2: COST VOLUME PROFIT ANALYSIS - 12 marks Mindy started a dog boarding facility called Puppy Plaza (PP) two years ago. They built the facility on their one-acre property located in a suburb of Toronto. PP is a well-maintained facility where owners can leave their dogs for a period ranging from one day to a maximum of one month. During their stay, each dog is provided with its own kennel", plenty of food and treats, and proper supervision from the PP staff. The capacity of PP is 20 dogs per day and they are open 300 days per year. Despite increasing the number of bookings to 4,000 in the past year, Mindy has been unable to make a profit for the second year in a row. Mindy approached you as she would like to know how many booking units she would need to break even. Mindy provides you with the following information about PP's operations: A booking unit represents an owner who booked a kennel for her/his dog for 1 day. PP charges a fixed rate of $28 dollar per booking. The cost of dog food is $5.25 per day. Each dog requires 30 minutes per day of direct labour from a PP staff member. The variable overhead costs of one booking unit is estimated to be $4.75 The fixed costs of operations are $4,200 per month. PP Plaza employees are paid $18 per hour. The capacity of PP is 20 dogs per day and they are open 300 days per year. a