ACC 202 Accounting Workbook Milestone 3

In this third milestone, you will respond to an updated scenario in which your business has opened and you need to report on your progress to your investors. You will complete your workbook based on the provided information, which you gained access to upon submitting Milestone Two last week.

To complete this assignment, review the prompt and grading rubric in the Milestone Three Guidelines and Rubric document. When you have finished your work, submit the assignment here for grading and instructor feedback

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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#CompanyProfileVariable & Fixed Costs

/xl/drawings/drawing1.xml#VariableFixedCostsCost Classification

/xl/drawings/drawing1.xml#CostClassificationContribution Margin

/xl/drawings/drawing1.xml#ContributionMarginBreak-Even Analysis

/xl/drawings/drawing1.xml#BreakevenAnalysisCOGM Schedule

/xl/drawings/drawing1.xml#COGMScheduleIncome Statement

/xl/drawings/drawing1.xml#COGMScheduleVariances

/xl/drawings/drawing1.xml#VariancesInstructions Milestone 1

/xl/drawings/drawing1.xml#InstructionsMilestone1Instructions Milestone 2

/xl/drawings/drawing1.xml#’Instructions%20-%20Milestone%202′!InstructionsMilestone2Instructions Milestone 3

/xl/drawings/drawing1.xml#’Instructions%20-%20Milestone%203′!InstructionsMilestone3

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
COMPANY PROFILE TAB
Determine a company name. Be creative (e.g. “Inspiring Dog Care”)
Pick a location (e.g. “Chicago”)
Define your company’s vision and mission for how your business will add value to the community
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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ACC202 – MANAGERIAL ACCOUNTING

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Company Profile

MILESTONE 1 – Company Profile
Compnay Name Wagging Tails Dog Care Center
Location Grand Rapids, MI
Vision A place you trust to take care of your dog at all times!
Mission Provide top notch care and grooming to the dogs of our community

ACC202 – MANAGERIAL ACCOUNTING

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Cost Classification

Wagging Tails Dog Care Center
MILESTONE 1 – Cost Classification Exercise
INSTRUCTIONS:
Putting an X in the appropriate spot, classify the costs highlighted in yellow as: Direct Material, Direct Labor, Overhead, or Period Costs. Other costs have been provided for you.
The fixed and variable cost classifications have been provided for you. For more information see Objective 1 in Chapter 5.
Item/Cost Direct Material Direct Labor Overhead Period Costs Fixed Variable
Groomer x x
Day care attendant x x
Receptionist x x
Kennel attendant x x
Food and water bowls x x
Depreciation on kennels x x
Rent x x
Utilties and insurance x x
Grooming tub 48″ x
Depreciation on heating system x x
Clippers x x
Shampoo (Crystal Clear: five-gallon pail) x x
Towels x x
Scissors (7-inch straight, ear & nose) x x
Toys (used in day care only) x x
Cleaning products (used throughout) x x
Dryer x

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Variable_Fixed

Wagging Tails Dog Care Center
MILESTONE 1 – Variable & Fixed Cost Exercise
INSTRUCTIONS:
Determine the per unit cost for each dog.
Fill in the blanks to get the per unit cost and fixed cost of each service.
Based on 5 grooms per day
GROOMING
Item Variable Costs Item Fixed Costs
Shampoo $ 1.04 Groomer $ 2,080.00
Clipper(s) 1.37 Rent 30.95
Bowls 0.72 Loan 20.00
Towels 5.83 Utilities and Insurance 28.57
Scissors 1.01 Depreciation on heating system 3.95
Cleaning Products: Odoban 2.08
Cleaning Products: Simple Green 2.36
Draw 200.00
Total Variable Costs $ 9.97 Total Fixed Costs $ 2,367.91
Based on 22 dogs per day for six days a week. Assume 25 operating days for kennel and 22 eight-hour work days for kennel attendant.
DAY CARE
Item Variable Costs Item Fixed Costs
Day care attendant $ 2.88 Rent $ 232.14
Toys 0.27 Loan 150.00
Bowls 0.10 Utilities and Insurance 214.29
Towels 1.40 Depreciation on heating system 29.64
Cleaning Products: Odoban 15.59
Cleaning Products: Simple Green 16.78
Draw 200.00
Total Variable Costs $ 4.65 Total Fixed Costs $ 858.44
Based on 12 dogs per day. Assume 22 eight-hour work days for kennel attendant.
BOARDING
Item Variable Costs Item Fixed Costs
Kennel attendant $ 5.62 Depreciation on kennels $ 80.00
Bowls 0.86 Rent 386.90
Towels 0.87 Loan 250.00
Utilities and Insurance 357.14
Depreciation on heating system 49.40
Cleaning Products: Odoban 25.98
Cleaning Products: Simple Green 29.55
Draw 200.00
Total Variable Costs $ 7.35 Total Fixed Costs $ 1,378.97

&8ACC202 – MANAGERIAL ACCOUNTING

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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

ACC202 – MANAGERIAL ACCOUNTING

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Contribution Margin Analysis

Wagging Tails Dog Care Center
MILESTONE 2 – Contribution Margin per Unit & Contribution Margin Ratio
INSTRUCTIONS:
Select a price from the scenarios below and compute the contribution for each service based on your selected price.
Variable cost per unit comes from your Variable_Fixed tab completed in Milestone 1.
SCENARIO (choose one from each category):
Dog Day Care
1. With pricing at $18 per dog per day, you can expect to have 22 dogs per day.
2. With pricing at $20 per dog per day, you can expect to have 15 dogs per day.
3. With pricing at $25 per dog per day, you can expect to have 10 dogs per day.
Overnight Boarding
1. With pricing at $25 per dog per day, you can expect to have 12 dogs per day.
2. With pricing at $28 per dog per day, you can expect to have 10 dogs per day.
3. With pricing at $30 per dog per day, you can expect to have 7 dogs per day.
Basic Groom
1. With pricing at $25 per dog per day, you can expect to have 5 dogs per day.
2. With pricing at $30 per dog per day, you can expect to have 4 dogs per day.
3. With pricing at $35 per dog per day, you can expect to have 3 dogs per day.
DAY CARE BOARDING GROOMING
Sales Price per Unit $ 18.00 $ 25.00 $ 25.00
Variable Cost per Unit 4.74 7.35 9.97
Contribution Margin $ 13.26 $ – 0 $ 17.65 $ – 0 $ 15.03

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Break-Even Analysis

Wagging Tails Dog Care Center
MILESTONE 2 – Break-Even Analysis
INSTRUCTIONS:
Show all steps and calculations to determine the break-even.
Determine the break-even for the target profit levels as outlined in the instructions.
Break-even = Fixed Costs / Contribution Margin
DAY CARE BOARDING GROOMING
Sales Price $ 18.00 $ 25.00 $ 25.00
Fixed Costs $ 858 $ 1,379 $ 2,368
Contribution Margin $ 13.26 $ 17.65 $ 15.03
Break-even Units (round up) 65.00 79.00 158.00
Target Profit $ 417.00 $ 583.00 $ 1,000.00
Break-even Units (round up) 97.00 112.00 225.00
Target Profit $ 667.00 $ 909.00 $ 1,500.00
Break-even Units (round up) 116.00 130.00 258.00

&8ACC202 – MANAGERIAL ACCOUNTING

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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

ACC202 – MANAGERIAL ACCOUNTING

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COS Schedule

Wagging Tails Dog Care Center
MILESTONE 3 – Statement of Cost of Services
INSTRUCTIONS:
The following are the actual numbers for January:
Materials
Purchased $5,000 of Materials
Consumed 40% of those purchased materials
Direct Labor
Direct Labor was $6,240
Overhead
Overhead was $2,800
Wagging Tails Dog Care Center
Statement of Cost of Services
For the Month Ended January 31, xxxx
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
Overhead
Total Service Costs
Deduct: Ending Work in Process Inventory
Cost of Services
* Cost of Goods Sold = Cost of Services
There is no finished goods inventory to maintain.

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Income Statement

Wagging Tails Dog Care Center
MILESTONE 3 – Income Statement
INSTRUCTIONS:
Complete the Statement in proper form
Revenue will be provided in an Announcement at the end of Module 4
(based on actual number of services for your pricing levels)
Additional Information necessary to complete the Income Statement:
General & Administrative Salaries paid = $1,200
Advertising = $100
Cleaning Products = $120
Depreciation = $83
Rent = $650
Loan = $420
Utilities & Insurance = $600
Wagging Tails Dog Care Center
Income Statement
For the Month Ended January 31, xxxx
Revenue:
Grooming $ – 0
Day Care – 0
Boarding – 0
Tota Revenue $ – 0
Cost of Services * – 0
Gross Profit $ – 0
Expenses:
G&A Salaries $ – 0
Advertising – 0
Cleaning Products – 0
Depreciation – 0
Rent – 0
Loan – 0
Utilities and Insurance – 0
Total Expenses $ – 0
Net Income / Loss $ – 0
* Cost of Goods Sold = Cost of Services
There is no finished goods inventory to maintain.

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Variances

Wagging Tails Dog Care Center
MILESTONE 3 – Variance Analysis
INSTRUCTIONS:
Prepare the variances and identify whether they are favorable or unfavorable.
The below website will provide further assistance with variances:
http://accounting-simplified.com/management/variance-analysis/material/price.html
DATA FOR VARIANCE ANALYSIS:
Standard Hours / Qty Standard Rate Actual Hours / Qty Actual Rate
Grooming Labor 150 $ 12.00 180 $ 11.50
Grooming Materials 1,000 $ 2.00 1,200 $ 3.00
Variance Favorable/ Unfavorable
Groomer Direct Labor Time Variance
(Actual Hours – Standard Hours) x Standard Rate $ – 0
Groomer 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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