Stephen runs a pet salon. He is currently grooming 120 dogs per week. If instead of grooming 120 dogs, he grooms 121 dogs, he will add $65.65 to his costs and $65.65 to his revenues. What will be the effect on his profits of grooming 121 dogs instead of 120 dogs? Stephen's profits will change by $ (Enter your response rounded to two decimal places.)

Question

Business

Sheldon Li

29 October, 15:54

Stephen runs a pet salon. He is currently grooming 120 dogs per week. If instead of grooming 120 dogs, he grooms 121 dogs, he will add $65.65 to his costs and $65.65 to his revenues. What will be the effect on his profits of grooming 121 dogs instead of 120 dogs? Stephen's profits will change by $ (Enter your response rounded to two decimal places.)

+2

Answers (1)

Know the Answer?

Jennifer Noble · Answer 1

Effect on income = $0

Explanation:

Giving the following information:

He is currently grooming 120 dogs per week. If instead of grooming 120 dogs, he grooms 121 dogs, he will add $65.65 to his costs and $65.65 to his revenues.

Contribution margin per dog = selling price - unitary variable cost

Contribution margin per dog = 65.65 - 65.65 = 0

Effect on income = 0*1 = $0