Pet Energy Therapy Association (PETA) treats peoples’ pets, and has the followin

Question

Pet Energy Therapy Association (PETA) treats peoples’ pets, and has the following cost structure:

Charge per therapy session $300

Variable cost per therapy session $ 50

Fixed costs $200,000

They expect to perform 1,000 two hour session each year (4/day, 5 days/week, 50 weeks/year).

A. Construct PETA’s profit and loss statement.

Revenue ($300 X 1,000) $300,000

Variable Costs ($50 X 1,000) 50,000

Contribution Margin  $250,000
Fixed Costs 200,000
Profit (Loss) $ 50,000

B.) How many sessions must PETA’s perform to breakeven? Sessions.

To earn a profit of $100,000, how many sessions must they provide this year?

D. If there is one fulltime employee, who spends two hours on each session (and 1 hour for lunch), what would we need to assume about the additional sessions needed to earn $100,000?

2.) Dental Diversity provides three basic service appointments; Cleaning, Check-up, and Full service. Total annual costs average $994,000. An RVU analysis indicates the following:

A. Using RVU methodology, what is the cost for each type of appointment?

B. If the goal is a 20% profit margin, what should be the price for each type of appointment?

Annual Average Appointments RVUs/appointment Cleaning 4,000 8 Check-ups 5,000 12 Full service 2,500 20

Explanation / Answer

As per Chegg Guidelines we answer one question per post. I have answered 1 question. Kindly post remaining questions in separate post to get the best answers Particulars Amount Amount per unit Revenues (300*1000)        300,000.00                         300.00 Variable cost(50*1000)          50,000.00                            50.00 Contribution        250,000.00                         250.00 Fixed Costs        200,000.00 Profit          50,000.00 BEP= Fixed Costs/ cont per unit BEP= 200,000/250 = 800 No of sessions = 800 Fixed Costs        200,000.00 Profit desired        100,000.00 Total contribtuin desired        300,000.00 Cont per unit                250.00 No of therapy sessions reqd= 1200 Additional sessions need to be conducted on weekends or employee need to do overtime

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