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  3. doggone groomers is in the dog-grooming business.

Doggone Groomers is in the dog-grooming business. Its operating costs are described by these formulas:...

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Accounting

Doggone Groomers is in the dog-grooming business. Its operating costs are described by these formulas:

Grooming supplies (variable) y = $0 + $4.00x

Direct labour (variable) y = $0 + $12.00x

Overhead (mixed) y = $8,000 + $1.00x

Puli, the owner, has determined that direct labour is the cost driver for all three categories of costs. Instructions

Prepare a flexible budget for activity levels of 550, 600, and 700 direct labour hours. a. Total cost: 550 units, $17,350; 600 units, $18,200; 700 units, $19,900

Explain why the flexible budget is more informative than a static budget.

Calculate the total cost per direct labour hour at each of the activity levels specified in part (a). c. Total cost per hour: 550 units, $31.55; 600 units, $30.33; 700 units, $28.43

The groomers at Doggone normally work a total of 650 direct labour hours during each month. Each grooming job normally takes a groomer 1 hours. Puli wants to earn a profit equal to 40% of the costs incurred. Determine what she should charge each pet owner for grooming. d. $51.28

State total budgeted cost formula, and prepare flexible budget reports for two time periods.

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