Anna has recently started Dapper Doggies, a dog grooming business in her hometown. She is debating whether she would like to have a brick-and-mortar location located in the heart of downtown or a mobile grooming truck that would allow her to travel all over the city. The brick-and-mortar store would allow her to have a consistent place to see clients. She would be able to charge $40 per dog and anticipates that she would see 100 dogs a month. Using a mobile truck would afford her the opportunity to see 150 dogs a month, but she would only be able to charge $33 per dog which also includes a convenience fee of $3 per dog. Below is a listing of monthly costs associated with each type of location she may choose:
Anna has decided to use zero-based budgeting to assist her in making a final selection.
a. Calculate the amount left for Anna to put into retained earnings if she decides to go with the brick-and-mortar location.
b. Calculate the amount left for Anna to put into retained earnings if she decides to go with the mobile truck.
c. Assume that Anna would really like to pursue the mobile truck as she enjoys the versatility. How many additional dogs would she need to groom each month to create the same outcome as the brick-and-mortar location? (Note: If needed, round up the final answer.)
d. Now, assume that Anna would prefer to pursue the brick-and-mortar location, but she would like to increase the amount remaining for each month to $1,200. What approach should she implement in order to achieve this amount?
e. Why is zero-based budgeting considered helpful when making decisions pertaining to allocating both new and existing funds?

Question

Anna has recently started Dapper Doggies, a dog grooming business in her hometown. She is debating whether she would like to have a brick-and-mortar location located in the heart of downtown or a mobile grooming truck that would allow her to travel all over the city. The brick-and-mortar store would allow her to have a consistent place to see clients. She would be able to charge $40 per dog and anticipates that she would see 100 dogs a month. Using a mobile truck would afford her the opportunity to see 150 dogs a month, but she would only be able to charge $33 per dog which also includes a convenience fee of $3 per dog. Below is a listing of monthly costs associated with each type of location she may choose:
   Anna has decided to use zero-based budgeting to assist her in making a final selection.
a. Calculate the amount left for Anna to put into retained earnings if she decides to go with the brick-and-mortar location.
b. Calculate the amount left for Anna to put into retained earnings if she decides to go with the mobile truck.
c. Assume that Anna would really like to pursue the mobile truck as she enjoys the versatility. How many additional dogs would she need to groom each month to create the same outcome as the brick-and-mortar location? (Note: If needed, round up the final answer.)
d. Now, assume that Anna would prefer to pursue the brick-and-mortar location, but she would like to increase the amount remaining for each month to $1,200. What approach should she implement in order to achieve this amount?
e. Why is zero-based budgeting considered helpful when making decisions pertaining to allocating both new and existing funds?

Quizplus · Accepted Answer

The Answer of Anna has recently started Dapper Doggies, a dog grooming business in her hometown. She is debating whether she would like to have a brick-and-mortar location located in the heart of downtown or a mobile grooming truck that would allow her to travel all over the city. The brick-and-mortar store would allow her to have a consistent place to see clients. She would be able to charge $40 per dog and anticipates that she would see 100 dogs a month. Using a mobile truck would afford her the opportunity to see 150 dogs a month, but she would only be able to charge $33 per dog which also includes a convenience fee of $3 per dog. Below is a listing of monthly costs associated with each type of location she may choose:
   Anna has decided to use zero-based budgeting to assist her in making a final selection.
a. Calculate the amount left for Anna to put into retained earnings if she decides to go with the brick-and-mortar location.
b. Calculate the amount left for Anna to put into retained earnings if she decides to go with the mobile truck.
c. Assume that Anna would really like to pursue the mobile truck as she enjoys the versatility. How many additional dogs would she need to groom each month to create the same outcome as the brick-and-mortar location? (Note: If needed, round up the final answer.)
d. Now, assume that Anna would prefer to pursue the brick-and-mortar location, but she would like to increase the amount remaining for each month to $1,200. What approach should she implement in order to achieve this amount?
e. Why is zero-based budgeting considered helpful when making decisions pertaining to allocating both new and existing funds?

Anna Has Recently Started Dapper Doggies, a Dog Grooming Business