Accounting Assignment

The next step in planning for your new business is to analyze the cost behaviors and systems of your industry and conduct the relevant financial calculations to determine appropriate costing solutions. In this milestone assignment, you will conduct a break-even analysis to determine your target profits and the selling price you plan to use to achieve these profits for each product.

Prompt

Use information from Milestone One and the provided

Milestone Two Market Research Data Appendix

to conduct a cost-volume profit analysis. Complete the “Contribution Margin Analysis” and “Break-Even Analysis” tabs in the

Project Workbook

 that you used for completing the Milestone One assignment.

Specifically, you must address the following rubric criteria:

• Contribution Margin. Determine your contribution margin per unit in the “Contribution Margin Analysis” tab.

  Choose a sales price for each product.
  Calculate the contribution margin for each product based on your sales price and the variable cost for that product. Show your work using calculations to the side of the table or using appropriate formulas in the table.

• Break-Even Analysis. Use cost-volume-profit (CVP) analysis to determine your break-even points for achieving your target profits in the “Break-Even Analysis” tab.

  Determine the break-even points for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.
  Determine break-even units for the suggested target profits for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.

Guidelines for Submission

Submit the Project Workbook with the “Contribution Margin Analysis” and “Break-Even Analysis” tabs completed. This file should be completed and submitted using Microsoft Excel.

Milestone Two: Market Research Data

You have conducted some market research for style and size of products you want to use to launch your business. The market research has indicated the following sales price ranges will be optimal for your area depending on style of products you choose to sell:

·

Collars

· With pricing at $20 per collar, you can expect to sell 30 collars per day.

· With pricing at $24 per collar, you can expect to sell 25 collars per day.

· With pricing at $28 per collar, you can expect to sell 20 collars per day

·

Leashes

· With pricing at $22 per leash, you can expect to sell 28 leashes per day.

· With pricing at $26 per leash, you can expect to sell 23 leashes per day.

· With pricing at $30 per leash, you can expect to sell 18 leashes per day.

· Harnesses

· With pricing at $25 per harness, you can expect to sell 25 harnesses per day.

· With pricing at $30 per harness, you can expect to sell 22 harnesses per day.

· With pricing at $35 per harness, you can expect to sell 20 harnesses per day.

Additionally, you will need to compare your break-even points for the following target profits for each area of your business to determine your prices:

· Collars

· Break-even

· $300 target profit each month

· $500 target profit each month

· Leashes

· Break-even

· $400 target profit each month

· $600 target profit each month

· Harnesses
· Break-even
· $500 target profit each month

· $650 target profit each month

Instructions

Southern

New Hampshire University College of Continuing Education (COCE) ACC2

0

2 – 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

&

Fi

x

ed

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

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

Instructions – Milestone 1

College of Continuing Education (COCE)
ACC202 – Managerial Accounting

for start-up costs – monthly payment of $420; in effect immediately; limited cash and loan funding – used angel investors

Grooming:

.

Day Care:

Boarding:

is $80 per month

General:

– $650 per month; Allocate based on square footage

.

	Southern New Hampshire University
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
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
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
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
12 Kennels;	Depreciation
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
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

ACC202 – MANAGERIAL ACCOUNTING

HOME

/xl/drawings/drawing2.xml#Home

Cost Classification

/Cost

Fixed Variable

x

x

x

x

x

x

x

Rent x

x

x

x

x

x

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	Direct Material	Direct Labor	Overhead	Period Costs
Salary – Collar maker
Salary – Leash maker
Salary – Harness maker
Salary – Receptionist
			High-tensile strength nylon webbing
			Polyester/nylon ribbons
			Buckles made of cast hardware
			Depreciation on sewing machines
				Utilities and insurance
				Scissors, thread, and cording
			Price tags
Office supplies
Oter business equipment
		Loan payment
			Salary to self

&8ACC202 – MANAGERIAL ACCOUNTING

HOME

/xl/drawings/drawing3.xml#Home

Variable and Fixed Costs

Item

Item Fixed Costs

High-tensile strength nylon webbing

Polyester/nylon ribbons Depreciation on sewing machines
Buckles made of cast hardware Rent
Price tags Utilities and insurance
Scissors, thread, and cording
Loan payment

Salary to self

Item Variable Cost/Item Item Fixed Costs

High-tensile strength nylon webbing

Polyester/nylon ribbons Depreciation on sewing machines

Buckles made of cast hardware Rent

Price tags Utilities and insurance
Scissors, thread, and cording

Loan payment
Salary to self

Total Fixed Costs

Item Variable Cost/Item Item Fixed Costs

High-tensile strength nylon webbing

Polyester/nylon ribbons Depreciation on sewing machines
Buckles made of cast hardware Rent
Price tags Utilities and insurance
Scissors, thread, and cording

Loan

Salary to self

Total Fixed Costs

Milestone One – Variable and Fixed Costs

Collars

Variable Cost/Item

$ 4.00

Collar maker’s salary (monthly)

$ 2,773.33

$ 183.33

$ 166.67

Total Variable Costs per Collar

Total Fixed Costs

Leashes

Leash maker’s salary (monthly)

Total Variable Costs per Leash

$

– 0

Harnesses

Harness maker’s salary

Total Variable Costs per Harness

&8ACC202 – MANAGERIAL ACCOUNTING
HOME

/xl/drawings/drawing4.xml#Home

Instructions – Milestone 2

Southern New Hampshire University
College of Continuing Education (COCE)
ACC202 – Managerial Accounting

IMPORTANT NOTE:

Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7)

GENERAL

Fixed & Variable cost designation is provided

INSTRUCTIONS FOR MILESTONE 2 (Due Week 4)

Make sure to completely review the Rubric for Milestone 2

ITEMS TO COMPLETE FOR THIS MILESTONE (Green Tabs):

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

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
HOME

/xl/drawings/drawing5.xml#Home

Contribution Margin Analysis

per Unit

Contribution Margin

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

&8ACC202 – MANAGERIAL ACCOUNTING
HOME

/xl/drawings/drawing6.xml#Home

Break-Even Analysis

COLLARS LEASHES HARNESSES
Sales Price

$ – 0 $ – 0

Fixed Costs $ – 0 $ – 0 $ – 0
Contribution Margin $ – 0 $ – 0 $ – 0

– 0 – 0 – 0

Break-Even Units (round up) – 0 – 0 – 0

Target Profit $ 500.00

Break-Even Units (round up) – 0 – 0 – 0

Milestone Two – Break-Even Analysis
									$ – 0
		Break-Even Units (round up)
	Target Profit	$ 300.00	$ 400.00		$ 500.00
$ 600.00	$ 650.00

&8ACC202 – MANAGERIAL ACCOUNTING
HOME

/xl/drawings/drawing7.xml#Home

Instructions – Milestone 3

Southern New Hampshire University
College of Continuing Education (COCE)
ACC202 – Managerial Accounting

IMPORTANT NOTE:

Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7)

GENERAL

Use the data at the top of the schedule to complete the report

Variance

INSTRUCTIONS FOR MILESTONE 3 (Due Week 5)
Make sure to completely review the Rubric for Milestone 3
ITEMS TO COMPLETE FOR THIS MILESTONE (Purple Tabs):
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 from your Cost of Services Provided Schedule
VARIANCES
Use the data at the top of the schedule to calculate the following:
Favorable / Unfavorable

ACC202 – MANAGERIAL ACCOUNTING
HOME

/xl/drawings/drawing8.xml#Home

COGS

0

0

– 0

Direct Labor
Overhead

0

Cost of Goods Sold

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

&8ACC202 – MANAGERIAL ACCOUNTING
HOME

/xl/drawings/drawing9.xml#Home

Income Statement

Collars $ – 0
Leashes – 0
Harnesses – 0

$ – 0

– 0

$ – 0

$ – 0

Depreciation – 0
Rent – 0
Utilities and insurance – 0

Scissors, thread, and cording

Loan – 0

$ – 0

$ – 0

Milestone Three – Income Statement

Revenue:

Total Revenue:

Cost of goods sold

Gross profit

Expenses:

General and administrative salaries

Total Expenses

Net Income/Loss

&8ACC202 – MANAGERIAL ACCOUNTING

Variances

Labor
Materials
Variance

$ – 0

Direct Labor Rate Variance

$ – 0

$ – 0

Direct Materials Price Variance

$ – 0

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

&8ACC202 – MANAGERIAL ACCOUNTING

ACC 202 Milestone One: Operational Costs Data Appendix

You plan to open a small business for manufacturing pet collars, leashes, and harnesses. You have found a workshop space you can use for sewing your products. After some research and planning, you have estimates for the various operating costs for your business.

The total square footage for the sewing rooms is

1

,500 square feet broken into three areas (500 square feet each). You have taken out a loan for start-up costs, and the monthly payment is $550; it goes into effect immediately and should be accounted for in your costs. You will also collect a modest salary for the first year of $500 per month; remember to divide evenly among the services.

Salary and Hiring Data

· One collar maker, who will be paid $16.00 per hour and work 40 hours per week

· One leash maker, who will be paid $16.00 per hour and work 40 hours per week

· One harness maker, who will be paid $17.00 per hour and work 40 hours per week

· One receptionist, who will be paid $15.00 per hour and work 30 hours per week

Other Costs

· Rent: $750 per month; allocate based on square footage

· High-tensile strength nylon webbing—$12 per yard of webbing

· 3 collars per yard of webbing

· 2 leashes per yard of webbing

· 2 harnesses per yard of webbing

· Polyester/nylon ribbons—$9 per yard of ribbon

· 3 collars per yard of webbing
· 2 leashes per yard of webbing
· 2 harnesses per yard of webbing

· Buckles made of cast hardware—$0.50 per buckle

· 4 buckles used per collar

· 3 buckles used per leash

· 8 buckles used per harness

· 3 industrial sewing machines at $3,300 each for a total of $9,900; depreciation is $165 per month (5-year life)

· Utilities and insurance: $600 per month; allocate based on square footage

· Scissors, thread, cording: $1,200

· Price tags: $250 for 2,500 ($0.10 each)

· Office supplies: $2,400 or $200 per month

· Other business equipment: $2,000

· Loan payment of $550 per month

·

Salary drawn of $500 per month

1

Instructions

Southern

New Hampshire University College of Continuing Education (COCE) ACC2

0

2 – 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

&

Fi

x

ed

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

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

Instructions – Milestone 1

College of Continuing Education (COCE)
ACC202 – Managerial Accounting

ED COSTS

for start-up costs – monthly payment of $420; in effect immediately; limited cash and loan funding – used angel investors

a month for first year; should be divided evenly amoung the services (grooming, day care, boarding)

Grooming:

.

Day Care:

Boarding:

is $80 per month

General:

– $650 per month; Allocate based on square footage

.

Southern New Hampshire University

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 & FI

X

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

Modest monthly draw of $

600

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

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

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

12 Kennels;

Depreciation

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

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

ACC202 – MANAGERIAL ACCOUNTING

HOME

/xl/drawings/drawing2.xml#Home

Cost Classification

/Cost

Fixed Variable

X x

X x

X x

X

X x

X x

X x

X x

Rent X x

X x

x

X x

X

x

x

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	Direct Material	Direct Labor	Overhead	Period Costs
Salary – Collar maker
Salary – Leash maker
Salary – Harness maker
Salary – Receptionist
			High-tensile strength nylon webbing
			Polyester/nylon ribbons
			Buckles made of cast hardware
			Depreciation on sewing machines
				Utilities and insurance
				Scissors, thread, and cording
			Price tags
Office supplies
Oter business equipment
		Loan payment
			Salary to self

&8ACC202 – MANAGERIAL ACCOUNTING

HOME

/xl/drawings/drawing3.xml#Home

Variable and Fixed Costs

Item

Item Fixed Costs

High-tensile strength nylon webbing

Polyester/nylon ribbons

Depreciation on sewing machines

Buckles made of cast hardware

Rent

Price tags

Utilities and insurance

Scissors, thread, and cording

Loan payment

Salary to self

.33

Item Variable Cost/Item Item Fixed Costs

High-tensile strength nylon webbing

$ 2,773.33

Polyester/nylon ribbons

Depreciation on sewing machines $ 55.00

Buckles made of cast hardware

Rent $ 250.00

Price tags $ 0.10 Utilities and insurance $ 200.00
Scissors, thread, and cording $ 400.00
Loan payment $ 183.33

Salary to self $ 166.67

Total Fixed Costs $ 4,028.33 $ 4,028.33

Item Variable Cost/Item Item Fixed Costs

High-tensile strength nylon webbing $ 6.00

Polyester/nylon ribbons $ 4.50 Depreciation on sewing machines $ 55.00

Buckles made of cast hardware $ 4.00 Rent $ 250.00

Price tags $ 0.10 Utilities and insurance $ 200.00
Scissors, thread, and cording $ 400.00

Loan $ 183.33

Salary to self $ 166.67

Total Fixed Costs

Milestone One – Variable and Fixed Costs
	Collars
		Variable Cost/Item
			$ 4.00	Collar maker’s salary (monthly)		$ 2,773.		33
		$ 3.00			$ 55.00
$ 2.00			$ 250.00
		$ 0.10			$ 200.00
			$ 400.00
		$ 183.33
		$ 166.67
Total Variable Costs per Collar	$	9.10			Total Fixed Costs					$ 4,028
	Leashes
	$ 6.00	Leash maker’s salary (monthly)
	$ 4.50
$ 1.50
Total Variable Costs per Leash		$	12.10
	Harnesses
Harness maker’s salary	$ 2,946.67
Total Variable Costs per Harness	$	14.60	$ 4,201.67

&8ACC202 – MANAGERIAL ACCOUNTING
HOME

/xl/drawings/drawing4.xml#Home

Instructions – Milestone 2

Southern New Hampshire University
College of Continuing Education (COCE)
ACC202 – Managerial Accounting

IMPORTANT NOTE:

Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7)

GENERAL

Fixed & Variable cost designation is provided

INSTRUCTIONS FOR MILESTONE 2 (Due Week 4)

Make sure to completely review the Rubric for Milestone 2

ITEMS TO COMPLETE FOR THIS MILESTONE (Green Tabs):

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

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
HOME

/xl/drawings/drawing5.xml#Home

Contribution Margin Analysis

per Unit

9.10 12.10 14.60

Contribution Margin $ 3.00 $ 4.00

Milestone Two – Contribution Margin Analysis
	COLLARS		LEASHES		HARNESSES
	Sales Price	$ 12.10		$ 16.10		$ 19.60
Variable Cost per Unit
	$ 5.00

&8ACC202 – MANAGERIAL ACCOUNTING
HOME

/xl/drawings/drawing6.xml#Home

Break-Even Analysis

COLLARS LEASHES HARNESSES
Sales Price $ 12.10 $ 16.10 $ 19.60
Fixed Costs $ 4,028 $ 4,028

Contribution Margin $ 3.00 $ 4.00 $ 5.00

$ 400.00

Break-Even Units (round up) 1,343 1,007 840

Target Profit $ 500.00

Break-Even Units (round up)

Milestone Two – Break-Even Analysis
$ 4,202
		Break-Even Units (round up)		1,343		1,007		840
	Target Profit	$ 300.00		$ 500.00
$ 600.00	$ 650.00
806	671		– 0	646

&8ACC202 – MANAGERIAL ACCOUNTING
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Instructions – Milestone 3

Southern New Hampshire University
College of Continuing Education (COCE)
ACC202 – Managerial Accounting

IMPORTANT NOTE:

Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7)

GENERAL

Use the data at the top of the schedule to complete the report

Variance

INSTRUCTIONS FOR MILESTONE 3 (Due Week 5)
Make sure to completely review the Rubric for Milestone 3
ITEMS TO COMPLETE FOR THIS MILESTONE (Purple Tabs):
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 from your Cost of Services Provided Schedule
VARIANCES
Use the data at the top of the schedule to calculate the following:
Favorable /	Unfavorable

ACC202 – MANAGERIAL ACCOUNTING
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COGS

0

0

– 0

$ 3,350

Direct Labor

Overhead

0

Cost of Goods Sold

Milestone Three – Statement of	Cost of Goods Sold
Beginning Work in Process Inventory
Direct Materials:
Materials: Beginning
Add: Purchases for month of January		$ 3,350
Materials available for use
Deduct: Ending materials
Materials Used
8,493
2,715
Total Costs
Deduct: Ending Work in Process Inventory
$ 14,558.33

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Income Statement

Collars

Leashes

Harnesses

Depreciation

Rent

Utilities and insurance 600
Scissors, thread, and cording

Loan

Milestone Three – Income Statement
Revenue:
$ 1,210
1,610
1,960
Total Revenue:	$ 9,995
Cost of goods sold	11,843
Gross profit	$ (1,848)
Expenses:
General and administrative salaries	$ 1,950
165
750
$ 1,200.00
550
Total Expenses	$ 5,215.00
Net Income/Loss	$ (1,848.33)

&8ACC202 – MANAGERIAL ACCOUNTING

Variances

Labor

$ 16.33

Materials 33

33 $ 12.00

Variance

Unfavorable

Direct Labor Rate Variance

$ – 0

Direct Materials Price Variance

$ – 0

Milestone Three – Variance Analysis
Data for Variance Analysis:
Budgeted (Standard) Hours/Qty	Budgeted (Standard) Rate	Actual Hours/Qty	Actual Rate
120		$ 16.33	130
	$ 12.00
Variances for Collar Sales
Favorable/ Unfavorable
Direct Labor Time Variance
(Actual Hours – Standard Hours) x Standard Rate	$ 163.33
(Actual Rate – Standard Rate) x Actual Hours			$ – 0
Direct Materials Quantity/Efficiency Variance
(Actual Quantity – Standard Quantity) x Standard Price
(Actual Price – Standard Price) x Actual Quantity

&8ACC202 – MANAGERIAL ACCOUNTING