In the second milestone of your final project you will compl

In the second milestone of your final project, you will complete your pre-opening strategy. You must analyze the cost behaviors and systems of your industry and then conduct the relevant financial calculations to determine appropriate costing solutions. Be sure to use your work from Milestone One to inform your analysis and proposals.

Scenario: Prior to Opening, Part II: Your market research indicated the following price ranges as optimal for your area:

Dog Day Care

o With pricing at $18 per dog per day, you can expect to have 22 dogs per day.

o With pricing at $20 per dog per day, you can expect to have 15 dogs per day.

o With pricing at $25 per dog per day, you can expect to have 10 dogs per day.

Overnight Boarding

o With pricing at $25 per dog per day, you can expect to have 12 dogs per day.

o With pricing at $28 per dog per day, you can expect to have 10 dogs per day.

o With pricing at $30 per dog per day, you can expect to have 7 dogs per day.

Basic Groom

o With pricing at $25 per groom, you can expect to do 5 grooms per day.

o With pricing at $30 per groom, you can expect to do 4 grooms per day.

o With pricing at $35 per groom, you can expect to do 3 grooms per day.

Additionally, you need to compare your break-even points for the following target profits for each area of your business:

Day Care

o Break-even

o $417 target profit each month

o $667 target profit each month

Boarding

o Break-even

o $583 target profit each month

o $909 target profit each month

Grooming

o Break-even

o $1,000 target profit each month

o $1,500 target profit each month

Determine your contribution margin per unit and contribution margin ratio

Determine your break-even points for achieving your target profits

Grooming-Total Variable Costs-$9.97; Total Fixed Costs-$2367.92

Day Care-Total Variable Costs-$4.74; Total Fixed Costs- $859.39

Boarding-Total Variable Costs- $7.36; Total Fixed Costs- $ $1,378.99

Solution

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. Dog Day Care Overnight Basic Groom Selling Price 18 20 25 25 28 30 25 30 35 Less: Variable Cost 4.74 4.74 4.74 7.36 7.36 7.36 9.97 9.97 9.97 Contribution Margin 13.26 15.26 20.26 17.64 20.64 22.64 15.03 20.03 25.03 Contribution Margin Ratio 74% 76% 81% 71% 74% 75% 60% 67% 72% Fixed Cost 859.39 859.39 859.39 1378.99 1378.99 1378.99 2367.92 2367.92 2367.92 Break Even (Fixed Cost/CM Ratio)                 1,167            1,126               1,060            1,954            1,871            1,827            3,939            3,547            3,311 Target Profit-1 (Fixed Cost+Target Proft)/CM Ratio 1733 1673 1575 2781 2662 2600 5602 5044 4709 Target Profit-2 (Fixed Cost+Target Proft)/CM Ratio 2072 2001 1884 3243 3104 3032 6434 5793 5409 Target Profit 417 417 417 583 583 583 1000 1000 1000 Target Profit 667 667 667 909 909 909 1500 1500 1500