Question

Logan and berkeley have a thriving dog grooming business which operates 5 hours a day for 4 days a week. They currently have one dog groomer and are considering hiring a second groomer. They believe that after a 12 week period, the second groomer should be able to groom 3 dogs per hour, but only groom 1 dog per hour in the first 12 weeks while they learn the ropes. By adding a second groomer, logan and berkeley would need to install an additional sink, costing $20,000, and also incur an additional $27 per hour in labour costs. Apart from labour, their current costs are $15 per dog groom (covering items such as dog shampoo) and $30,000 in fixed costs per year (eg. Rent). They currently charge $50 per dog groom. How many weeks would it take for the second groomer to pay off and make a profit?.

Answer 1

The number of weeks is going to take the new employee to start making a profit is 33 weeks.

Calculate the total costs:

Costs related to hiring a new employee include

• $20,000 (new sink) + $27 per hour + $15 per dog groom.

Now, let's calculate the total costs per week

First 12 weeks

• $20,000 (new sink) + $540 per week + $300  (grom 20 dogs) =$20,840

After 12 weeks

• $20,000 (new sink) + $540 per week + $900  (grom 60 dogs) = $21,440

Calculate the total profit:

• $35 per dog
• First 12 weeks: $700
• After 12 weeks:  $2100

Finally, calculate how much it will take this new employee to start getting a profit:

• Profit during the first 12 weeks: $8,400
• Costs during the first 12 weeks:  $20,840 + 10,080
• Total balance: $21,920 - $8,400 = $13,520

Profit after the first twelve weeks

• Profits per week: $2100
• Costs: $13,520 + $1,440 per week

After 20 weeks

• Profits per week: $42,000
• Costs: $13,520 + $28,800 =  $42,320
• Total balance: $42,320 - $42,000 = $300

This means that by the end of week 32 the employee has almost paid all the money and it is expected by week 33 he can start to make a profit.

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