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Scenario 1

question 24

Multiple Choice

Scenario 1.2 Use the following to answer the questions.Paws and Claws Hotel is a full-service pet salon and boarding kennel. Paws and Claws has an interactive website where customers can directly book a grooming appointment, obedience class, or overnight accommodations for their dog or cat. Paws and Claws has several unexpected services, such as a 600-square foot swimming pool, complete with slide and dog-friendly graduated steps to help them exit the pool. Customers can also drop their dog or cat off each morning for pet day care. Paws and Claws has a pick-up and delivery service, webcams in every kennel so that pet families can view their pets while away, and pet "furniture" so that the cats and dogs can lie on sofas just like at home. Paws and Claws is also open 24 hours a day, 365 days each year so that customers can pick up their pet at any time.The cost for an overnight stay at Paws and Claws averages $50, compared to competing kennels at about $30. The day care costs are $25 for either a dog or cat. The majority of Paws and Claws' competitors don't offer the day care service, and require an two-day minimum for overnight stays.Informal discussions with customers led to the addition of pet day care and 24-hour hours of operation. Previously, Paws and Claws was more interested in competing based on its prices.
-Refer to Scenario 1.2. Previously, Paws and Claws was most likely using a ____ orientation, while now it is now in the process of employing the _______.

Definitions:

Cost Allocated

The portion of expenses assigned to a specific product, service, or department within a company, as part of cost accounting practices.

Assembly Department

An Assembly Department is a section within a manufacturing facility where components are assembled into final products.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs and treats fixed costs as period expenses.