5-2 Milestone Three: Project Workbook

DUE IN 24 HOURS!!!

MILESTON 4 ASSIGNMENT MUST BE COMPLETED FIRST THEN THIS ASSIGNMENT CAN BE COMPLETED. THE SAME PERSON COMPLETING MILESTONE 4 WILL ALSO BE COMPLETING THIS ASSIGNMENT TO MAKE SURE ACCURACY

Scenario

It has now been one month since you launched your business. You are meeting with a few investors soon to share your vision for the company and to ask for more funding. You will be sharing your company’s financial health at this meeting. To do that, you need to determine and analyze your company’s performance over the last month using the data provided.

Prompt

Use the information in the Milestone Three Actual Costs and Revenue Data Appendix Word Document to evaluate your company’s performance, and complete the remaining tabs in the Project Workbook Spreadsheet that you used for the Milestone One and Two assignments.

Specifically, you must address the following rubric criteria:

• Statement of Cost of Goods Sold: Prepare the statement of cost of goods sold in the “COGS” tab of the workbook. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table.
• Income Statement: Use the given revenue data to prepare the “Income Statement” tab table and calculate the net income. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table.
• Variance Analysis: Prepare the data in the “Variances” tab to determine whether the variances are favorable or unfavorable. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table.
• Complete the data table for the variances by entering the budgeted (standard) and actual labor and material values. Remember to use the estimates for expected sales from your Milestone Two assignment.
• Determine the variances for direct labor and direct materials in the “Variances” tab.
• Evaluate the significance of the variances in the “Variances” tab, and mark them as favorable or unfavorable.

Guidelines for Submission

Submit the Project Workbook with all tabs completed. This file should be completed and submitted using Microsoft Excel.

Instructions

 Southern New Hampshire University College of Continuing Education (COCE) ACC202 – Managerial Accounting MILESTONE 1 (Due in Module 2) MILESTONE 2 (Due in Module 4) MILESTONE 3 (Due in Module 5) 1. 1. 1. Name Choose a price range and calculate: Create a Cost of Goods Manufactured Schedule Location Grooming Vision Day Care Mission Boarding 2. 2. 2. Identify the following: Calculate the break-even units Create an Income Statement Direct Materials Grooming Revenue will be provided end of week 4 Diret Labor Day Care Manufacturing Overhead Boarding Period Costs Calculate the break-even for target profits 3. Grooming 3. Day Care Calculate the Variable & Fixed Costs for: Boarding Calculate for the Grooming line: Grooming Direct Labor Time Variance Day Care Direct Labor Rate Variance Boarding Direct Materials Efficiency Variance Direct Materials Price Variance

ACC202 – MANAGERIAL ACCOUNTING

Company Profile

/xl/drawings/drawing1.xml#CompanyProfile

Variable & Fixed Costs

/xl/drawings/drawing1.xml#VariableFixedCosts

Cost Classification

/xl/drawings/drawing1.xml#CostClassification

Contribution Margin

/xl/drawings/drawing1.xml#ContributionMargin

Break-Even Analysis

/xl/drawings/drawing1.xml#BreakevenAnalysis

COGM Schedule

/xl/drawings/drawing1.xml#COGMSchedule

Income Statement

/xl/drawings/drawing1.xml#COGMSchedule

Variances

/xl/drawings/drawing1.xml#Variances

Instructions Milestone 1

/xl/drawings/drawing1.xml#InstructionsMilestone1

Instructions Milestone 2

/xl/drawings/drawing1.xml#’Instructions%20-%20Milestone%202′!InstructionsMilestone2

Instructions Milestone 3

Instructions – Milestone 1

 Southern New Hampshire University College of Continuing Education (COCE) ACC202 – Managerial Accounting INSTRUCTIONS FOR MILESTONE 1 (Due Week 2) IMPORTANT NOTE: Make sure to completely review the Rubric for Milestone 1 Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7) ITEMS TO COMPLETE FOR THIS MILESTONE (Blue Tabs): GENERAL You plan to open a pet services business that will offer dog grooming, day care and boarding COST CLASSIFICATION Accurately classify all of your costs (direct material, direct labor, manufacturing overhead, period costs) Fixed & Variable cost designation is provided VARIABLE & FIXED COSTS Determine your per unit cost per dog for grooming, day care and boarding OPERATIONAL & COST INFORMATION: For simplicity, base all calculations using 30 days in each month OPERATIONAL DATA Grooming: The Groomer can groom 5 dogs a day, 5 days a week Each grooming takes 1.5 labor hours Day Care: The Day Care can house 10 large dogs and 12 small dogs daily. Day Care is offered 6 days a week Boarding: There are 12 kennels (single dog only). Boarding (kennel services) is offered every day Facilities: The Grooming facility is 200 square feet The Boarding facility is 2,500 square feet The Day Care facility is 1,500 square feet General: Loan for start-up costs – monthly payment of \$420; in effect immediately; limited cash and loan funding – used angel investors Modest monthly draw of \$600 a month for first year; should be divided evenly amoung the services (grooming, day care, boarding) SALARY & HIRING DATA Groomer (Allison) – \$12.00 an hour, 40 hours a week Day Care Attendant (Beverly) – \$9.00 per hour, based on need Receptionist (Cathie) – \$8.50 per hour, 30 hours a week Kennel Attendant (Ben) – \$11.50 per hour, based on need OTHER COST DATA Grooming: Dog Grooming Arm – \$300 . Grooming Table – \$900 Grooming Tub – \$2,800 Clippers – \$136.99; can be used for 100 grooms Shampoo – \$103.96 per 5-gallon pail; can be used for 100 grooms Salon Tuff Capri Mobile Carry Cart – \$90 Scissors (7 inch straight) – \$194.99; used for 200 grooms Scissors (ear and nose) – \$7.49; used for 200 grooms Day Care: Fencing for Day Care area – \$1,249 Fencing Installation – \$1,000 Toys – \$3.29 per 6 pack; one toy will last for two dogs in day care per day Rubberized Flooring for Day Care – \$3,800 Boarding: 12 Kennels; Depreciation is \$80 per month General: Food & Water bowls – \$3.59 per unit Day Care – two bowls last for every 75 dogs that attend daycare Boarding – two bowls last for every 100 dogs boarded; two bowls per kennel Grooming – each bowl lasts for 20 grooms and you need 4 bowls at all times Towels – \$34.99 per 12 pack Day Care – 12 towels for every 25 dogs Boarding – 12 towels for every 40 dogs Grooming – 2 towels for every groom per day Heating System – \$10,000; Depreciation is \$83 per month; Allocate based on square footage Rent – \$650 per month; Allocate based on square footage Utilities / Insurance – \$600 per month; Allocate based on square footage Cage Bank – \$2,200 per set of 5 Dryer – \$1,250 Cleaning Products Odoban – \$14.55 per gallon; Each area wil dilute 1 oz to 1 gallon of water; Allocate based on square footage Simple Green – \$15.66 per gallon; Each area will dilute 1 oz to 1 gallon of water; Allocate based on square footage .

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Cost Classification

Milestone One – Cost Classification
INSTRUCTIONS:
Putting an X in the appropriate spot, classify the costs as: Direct Material, Direct Labor, Overhead, or Period Costs.
The Fixed and Variable cost classifications have been provided for you.
Item/Cost Direct
Material
Direct
Labor
Salary – Collar maker × x
Salary – Leash maker × x
Salary – Harness maker × x
Salary – Receptionist × ×
High-tensile strength nylon webbing × x
Polyester/nylon ribbons × x
Buckles made of cast hardware × x
Depreciation on sewing machines × x
Rent × x
Utilities and insurance × x
Scissors, thread, and cording × x
Price tags × x
Office supplies × ×
Loan payment × x
Salary to self × x

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Variable and Fixed Costs

Milestone One – Variable and Fixed Costs
Collars
Item Variable Cost/Item Item Fixed Costs
High-tensile strength nylon webbing \$ 4.00 Collar maker’s salary (monthly) \$ 2,773.33 High tensile nylon = 12/3=4 Collar maker’s salary = 40hours×16×4.33 Weeks=2771
Polyester/nylon ribbons \$ 3.00 Depreciation on sewing machines \$ 55.00 polyester nylon =9/3=3 Depreciation = 165/3= 55
Buckles made of cast hardware \$ 2.00 Rent \$ 250.00 Buckles made of cast hardware = 0.5×4=2 Rent = 500/1500 squarefootage=0.33×750 = 250
Price tags \$ 0.10 Utilities and insurance \$ 200.00 Utilities and insurance = 600/1500×500 = 200
Scissors, thread, and cording \$ 400.00 Scissors, thread and coding = 1200/3=400
Loan payment \$ 183.33
Salary to self \$ 166.67
Total Variable Costs per Collar \$ 9.10 Total Fixed Costs \$ 4,028.33 Total variable costs per collar =4+3+2+0.1=9.1 Total fixed costs per collar =2773+55+250+200+400+183+167= 4028.33
Leashes
Item Variable Cost/Item Item Fixed Costs
High-tensile strength nylon webbing \$ 6.00 Leash maker’s salary (monthly) \$ 2,773.33 High tensile strength=12/2 = 6 Leash makers salary = 40 hours×16 per hour × 4.33 weeks = 2773.33
Polyester/nylon ribbons \$ 4.50 Depreciation on sewing machines \$ 55.00 Polyester nylon = 9/2 = 4.5 Depre ciation on sewing machines = 165/3 = 55
Buckles made of cast hardware \$ 1.50 Rent \$ 250.00 Buckles made of cast hardware = 3×0.5 =1.5 Rent = 500/1500 multiplied by750 = 250
Price tags \$ 0.10 Utilities and insurance \$ 200.00 price tags are already given as 0.1 Utilities and insurance = (600/1500)×500=200
Scissors, thread, and cording \$ 400.00 Scissors thread and coding = 1200/3 = 400
Loan payment \$ 183.33 Loan payment = 550/3 = 183.33
Salary to self \$ 166.67 Salary to self = 500/3 = 166.666
Total Variable Costs per Leash \$ 12.10 Total Fixed Costs \$ 4,028.33 Total Vc per leash= 6+4.5+1.5+0.1 = 12.1 Total FC per leash = 2773+55+250+200+400+183+167 = 4028.3
Harnesses
Item Variable Cost/Item Item Fixed Costs
High-tensile strength nylon webbing \$ 6.00 Harness maker’s salary \$ 2,946.40 High tensile strength nylon= 12/2 = 6 Harness makers salary = 40 hours×17per hour×4.333 = 2946.4
Polyester/nylon ribbons \$ 4.50 Depreciation on sewing machines \$ 55.00 Polyester ribbopns =9/2 =4.5 Depreciation on sewing machine = 165/3 = 55
Buckles made of cast hardware \$ 4.00 Rent \$ 250.00 Buckles made of cast hardware = 8×0.5 = 4 Rent = 500/1500, answer multiplied by 750 = 250
Price tags \$ 0.10 Utilities and insurance \$ 200.00 Price tags are already given =0.1 Utilities and insurance = 600/1500 answer multiplied by 500 = 200
Scissors, thread, and cording \$ 400.00 Scissors,thread and coding = 1200/3 = 400
Loan \$ 183.33 Loan = 550/3 = 183.33
Salary to self \$ 166.67 Salary to self = 500/3 = 166.666
Total Variable Costs per Harness \$ 14.60 Total Fixed Costs \$ 4,201.40 Total VC per herness =6+4.5+4+0.1= Total FC per herness = 2946+55+250+200+400+183.33+166.67 = 4201.4

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Instructions – Milestone 2

 Southern New Hampshire University College of Continuing Education (COCE) ACC202 – Managerial Accounting INSTRUCTIONS FOR MILESTONE 2 (Due Week 4) IMPORTANT NOTE: Make sure to completely review the Rubric for Milestone 2 Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7) ITEMS TO COMPLETE FOR THIS MILESTONE (Green Tabs): GENERAL Use data from Milestone 1 in your analysis CONTRIBUTION MARGIN ANALYSIS Select a price for each service (grooming, day care, boarding) Determine the variable cost from the Variable_Fixed tab for each service Calculate the contribution margin for each service based on your sales price and the variable cost for that service BREAK-EVEN ANALYSIS Determine the fixed cost from the Variable_Fixed tab for each service Fixed & Variable cost designation is provided Calculate the break-even units (round up) for each service Calculate the break-even units (round up) for suggested target profit levels for each service

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Contribution Margin Analysis

Milestone Two – Contribution Margin Analysis
COLLARS LEASHES HARNESSES
Sales Price per Unit
Variable Cost per Unit
Contribution Margin

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Break-Even Analysis

 Milestone Two – Break-Even Analysis COLLARS LEASHES HARNESSES Sales Price \$ – 0 \$ – 0 \$ – 0 Fixed Costs \$ – 0 \$ – 0 \$ – 0 Contribution Margin \$ – 0 \$ – 0 \$ – 0 Break-Even Units (round up) – 0 – 0 – 0 Target Profit \$ 300.00 \$ 400.00 \$ 500.00 Break-Even Units (round up) – 0 – 0 – 0 Target Profit \$ 500.00 \$ 600.00 \$ 650.00 Break-Even Units (round up) – 0 – 0 – 0

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Instructions – Milestone 3

 Southern New Hampshire University College of Continuing Education (COCE) ACC202 – Managerial Accounting INSTRUCTIONS FOR MILESTONE 3 (Due Week 5) IMPORTANT NOTE: Make sure to completely review the Rubric for Milestone 3 Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7) ITEMS TO COMPLETE FOR THIS MILESTONE (Purple Tabs): GENERAL Use data from Milestone 1 and Milestone 2 in your analysis Revenue data needed for the Income Statement will be provided at the end of Module 4 COST OF SERVICES PROVIDED SCHEDULE Use the data at the top of the schedule to complete the report INCOME STATEMENT Use the data at the top of the schedule to complete the report Use the data from your Cost of Services Provided Schedule VARIANCES Use the data at the top of the schedule to calculate the following: Variance Favorable / Unfavorable

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COGS

Milestone Three – Statement of Cost of Goods Sold
Beginning Work in Process Inventory \$ – 0
Direct Materials:
Materials: Beginning 0
Add: Purchases for month of January
Materials available for use
Deduct: Ending materials
Materials Used
Direct Labor
Total Costs
Deduct: Ending Work in Process Inventory 0
Cost of Goods Sold

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Income Statement

Milestone Three – Income Statement
Revenue:
Collars \$ – 0
Leashes – 0
Harnesses – 0
Total Revenue: \$ – 0
Cost of goods sold – 0
Gross profit \$ – 0
Expenses:
General and administrative salaries \$ – 0
Office supplies – 0
Total Expenses \$ – 0
Net Income/Loss \$ – 0

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Variances

Milestone Three – Variance Analysis
Data for Variance Analysis:
Budgeted (Standard)
Hours/Qty
Budgeted (Standard)
Rate
Actual
Hours/Qty
Actual
Rate
Labor
Materials
Variances for Collar Sales
Variance Favorable/
Unfavorable
Direct Labor Time Variance
(Actual Hours – Standard Hours) x Standard Rate \$ – 0
Direct Labor Rate Variance
(Actual Rate – Standard Rate) x Actual Hours \$ – 0
Direct Materials Quantity/Efficiency Variance
(Actual Quantity – Standard Quantity) x Standard Price \$ – 0
Direct Materials Price Variance
(Actual Price – Standard Price) x Actual Quantity \$ – 0

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ACC 202 Milestone Three: Actual Costs and Revenue Data Appendix

At the end of the first month of opening your business, you calculate the actual operating costs of the business and the income you earned. You also notice and document the difference in what you budgeted for certain materials and labor against the actual amounts you spent on the same.

For your
statement of
cost of goods sold, use the following data regarding the actual costs incurred by the business over the past month:

Materials purchased: \$20,000

Consumed 80% of the purchased materials

Direct labor: \$8,493

Note: Assume that the beginning materials and ending work in process are zero for the month.

Use the following revenue and cost information for the
income statement. Note that the revenue you use will depend on the pricing level options you chose in Milestone Two. Also, assume that after accounting for weekends and other holidays, there were 20 business days in the first month of operation. For example, if you chose a sales price of \$20 per collar, the actual number of collars sold in the month was 33 per day or 33 x 20 = 660 per month.

 Established Sales Price Number of Items Sold per Day Collars \$20 33 \$24 28 \$28 23 Leashes \$22 28 \$26 23 \$30 18 Harnesses \$25 25 \$30 22 \$35 20

The other costs incurred by the business include:

Receptionist: \$1,950

Office supplies: \$200

Variance

At the end of the month, you find that the labor and materials spent on manufacturing collars was different from what you estimated:

The collar maker had to work nine hours a day instead of eight due to an increased demand for collars.

Because of the increased demand, the hourly rate you paid your employee for making the collars increased to \$16.50.

An increase in the cost of raw material led the direct material cost per collar to increase to \$10.

However, you also made and sold 60 more collars than you expected to sell in the month.

You now need to determine the
variance in the materials and labor cost from what you estimated in Milestone Two based on the market research data.

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