Scenario: Prior to Opening, Part I: You plan to open apet-services business that will offer dog grooming, day care, andboarding. You can be creative in deciding the name of your business(e.g., âInspiring Dog Careâ), its geographical location (e.g.,Chicago), and its mission and vision for adding value to thecommunity. You will be asked to make choices for a few otherdetails to customize your case; otherwise, you should use theinformation below. There are 12 kennels (single dog only) and theday care area can house 10 large dogs and 12 small dogs each day.The grooming facility is 200 square feet, the boarding facility is2,500 square feet, and the day care is 1,500 square feet. Yourgroomer can groom five dogs a day for five days a week; each groomconsists of 1.5 labor hours. You also offer dog day care six days aweek, and kenneling every day. You have taken out a loan forstart-up costs and the monthly payment is $420; it goes into effectimmediately and should be accounted for in your costs. With limitedcash contribution and loan funding, you located two angelinvestors. You will collect a modest draw for the first year of$600 a month; remember to divide evenly among the services. Note:For simplicity, base all calculations using 30 days in eachmonth.
You have hired the following people:
? A groomer, Allison, who will be paid $12/hour and work 40hours a week
? A day care attendant, Beverly, who will be paid $9/hour andwill work based on need
? A receptionist, Cathie, who will be paid $8.50/hour and work30 hours a week
? A kennel attendant, Ben, who will be paid $11.50/hour and willwork based on need A complete list of additional costs is providedbelow:
? Food and water bowls: $3.59/unit o Daycare: Two bowls last forevery 75 dogs that attend daycare. o Boarding: Two bowls last forevery 100 dogs that are boarded; you need two bowls per kennel. oGrooming: Each bowl lasts for 20 grooms and you need four bowls atall times.
? Fencing for daycare area: $1,249
? Installation of fencing: $1,000
? Dog grooming arm: $300
? 12 kennels: $9,500
? Kennel depreciation is $80/month
? Rent: $650/month; allocate based on square footage
? Utilities/insurance: $600/month; allocate based on squarefootage
? Grooming table: $900
? Grooming tub: $2800
? Heating system: $10,000
? Heating system depreciation is $83/month; allocate based onsquare footage
? Clippers: $136.99; can be used for 100 grooms
? Shampoo: $103.96 per five-gallon pail, which can be used for100 grooms
? Cage bank: $2200 per set of 5
? Salon Tuff Capri mobile carry cart: $90
? Towels: $34.99 per 12 pack o Day care: You need to have 12towels for every 25 dogs. o Boarding: You need to have 12 towelsfor every 40 dogs. o Grooming: You need to have two towels forevery groom per day.
? Scissors: (1) 7-inch straight is $194.99, and (1) ear-and-noseis $7.49; each can be used for 200 grooms.
? Toys: $3.29 per 6-pack; one toy will last for two dogs in daycare, per day.
? Cleaning products: o Odoban: $14.55/gallon: Each area willdilute 1 oz to 1 gallon of water; allocate based on square footage.o Simple Green: $15.66/gallon: each area will dilute 1 oz to 1gallon of water; allocate based on square footage.
? Dryer: $1250
? Rubberized flooring for day care: $3800
? You have taken out a loan for start-up costs and the monthlypayment is $420; it goes into effect immediately and should beaccounted for in your costs.
? You will collect a modest draw for the first year of $600 amonth
*FOR EACH ABOVE ITEM OR COST, CLASSIFY AS: DIRECTMATERIALS, DIRECT LABOR, MANUFACTURING OVERHEAD OR PERIODCOST*