# Milestone 3.1 PW 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 th

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Milestone 3.1 PW 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

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
/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

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

.

ACC202 – MANAGERIAL ACCOUNTING

HOME
/xl/drawings/drawing2.xml#Home

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 x

Salary – Leash maker X x

Salary – Harness maker X x

Salary – Receptionist X

High-tensile strength nylon webbing X x

Polyester/nylon ribbons X x

Buckles made of cast hardware X x

Depreciation on sewing machines X x

Rent X x

Utilities and insurance X x

Scissors, thread, and cording X x

Price tags X x

Office supplies X

Loan payment X x

Salary to self X x

&8ACC202 – MANAGERIAL ACCOUNTING

HOME
/xl/drawings/drawing3.xml#Home

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

Polyester/nylon ribbons \$ 3.00 Depreciation on sewing machines \$ 55.00

Buckles made of cast hardware \$ 2.00 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 Variable Costs per Collar \$ 9.10 Total Fixed Costs \$ 4,028.33

Leashes

Item Variable Cost/Item Item Fixed Costs

High-tensile strength nylon webbing \$ 6.00 Leash maker’s salary (monthly) \$ 2,773.33

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

Buckles made of cast hardware \$ 1.50 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 Variable Costs per Leash \$ 12.10 Total Fixed Costs \$ 4,028.33

Harnesses

Item Variable Cost/Item Item Fixed Costs

High-tensile strength nylon webbing \$ 6.00 Harness maker’s salary \$ 2,946.67

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 Variable Costs per Harness \$ 14.60 Total Fixed Costs \$ 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

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

HOME
/xl/drawings/drawing5.xml#Home

Contribution Margin Analysis

Milestone Two – Contribution Margin Analysis

COLLARS LEASHES HARNESSES

Sales Price per Unit \$ 20.00 \$ 22.00 \$ 25.00

Variable Cost per Unit 9.10 12.10 14.60

Contribution Margin \$ 10.90 \$ 9.90 \$ 10.40

&8ACC202 – MANAGERIAL ACCOUNTING

HOME
/xl/drawings/drawing6.xml#Home

Break-Even Analysis

Milestone Two – Break-Even Analysis

COLLARS LEASHES HARNESSES

Sales Price \$ 20.00 \$ 22.00 \$ 25.00

Fixed Costs \$ 4,028 \$ 4,028 \$ 4,202

Contribution Margin \$ 10.90 \$ 9.90 \$ 10.40

Break-Even Units (round up) 369.57 406.90 404.01

Target Profit \$ 300.00 \$ 400.00 \$ 500.00

Break-Even Units (round up) 397.09 447.31 452.08

Target Profit \$ 500.00 \$ 600.00 \$ 650.00

Break-Even Units (round up) 415.44 467.51 466.51

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.

&8ACC202 – MANAGERIAL ACCOUNTING

HOME
/xl/drawings/drawing7.xml#Home

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

HOME
/xl/drawings/drawing8.xml#Home

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 – 0

Materials Used

Direct Labor

Total Costs

Deduct: Ending Work in Process Inventory 0

Cost of Goods Sold

&8ACC202 – MANAGERIAL ACCOUNTING

HOME
/xl/drawings/drawing9.xml#Home

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

Depreciation – 0

Rent – 0

Utilities and insurance – 0

Loan – 0

Total Expenses \$ – 0

Net Income/Loss \$ – 0

&8ACC202 – MANAGERIAL ACCOUNTING

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

&8ACC202 – MANAGERIAL ACCOUNTING

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