Question

Hi!  Select a price from below and compute the contribution margin for each service based on your selected price. Variable cost per unit come from the Variable_Fixed page

Your market research indicated the following price ranges as optimal:

1. Dog Day Care

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

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

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

2. Overnight boarding

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

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

c. With pricing at $35 per dog per day, you can expect to have 7 dogs per day.

3. Basic Groom

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

b. With pricing at $25 per groom, you can expect to do 4 grooms per day.

c. With pricing at $25 per groom, you can expect to do 3 grooms per day.

Variable / Fixed costs

Grooming

Total Variable Costs $9.97           Total Fixed Costs $2,367.92

Day Care

Total Variable Costs $4.75           Total Fixed Costs $859.39

Boarding

Total Variable Costs $7.36           Total Fixed Costs $1,378.99

Answer 1

1. Dog Day Care	Selling Price	Variable cost per unit	Contribution margin per unit = SP - VC	# of Dogs	Total Contribution margin
a	$18.00	$4.75	$13.25	22	$291.50
b	$20.00	$4.75	$15.25	15	$228.75
c	$25.00	$4.75	$20.25	10	$202.50
2. Overnight boarding	Selling Price	Variable cost per unit	Contribution margin per unit = SP - VC	# of Dogs	Total Contribution margin
a	$25.00	$7.36	$17.64	12	$211.68
b	$28.00	$7.36	$20.64	10	$206.40
c	$35.00	$7.36	$27.64	7	$193.48
3. Basic Groom	Selling Price	Variable cost per unit	Contribution margin per unit = SP - VC	# of Dogs	Total Contribution margin
a	$25.00	$9.97	$15.03	5	$75.15
b	$25.00	$9.97	$15.03	4	$60.12
c	$25.00	$9.97	$15.03	3	$45.09