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ACC202 M3 SNHU Income Statement Revenue Information

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ACC 202 Milestone Three Income Statement Revenue Information In order to complete Milestone Three, you will need the following income statement revenue information. Note that the revenue you use will depend on the pricing level options you chose in Milestone Two. Income for January-actual activity based on price levels: For example, if you chose a grooming price of $25 per groom, the actual grooms in January were 4 per day assuming a 30-day month. If you chose. . . Grooming price $25 Grooming price $30 Grooming price $35 Daycare price $18 Daycare price $20 Daycare price $25 Kennel price $25 Kennel price $28 Kennel price $30 The actual # of grooms/daycare/kennel 4 grooms per day 3 grooms per day 2 grooms per day 22 dogs per day 12 dogs per day 9 dogs per day 12 dogs per day 9 dogs per day 6 dogs per day Southern New Hampshire University College of Continuing Education (COCE) ACC 202 – Managerial Accounting MILESTONE 1 (Due in Module 2) MILESTONE 2 (Due in Module 4) Instructions Milestone 1 1. Company Profile Instructions Milestone 2 1. Name Location Vision Mission 2. Cost Classification Identify the following: Direct Materials Diret Labor Manufacturing Overhead Period Costs 3. Variable and Fixed Costs Calculate the Variable and Fixed Costs for: Grooming Day Care Boarding MILESTONE 3 (Due in Module 5) Contribution Margin Instructions Milestone 3 1. Choose a price range and calculate: Grooming Day Care Boarding 2. Break-Even Analysis Create a Cost of Services Schedule. 2. Calculate the break-even units: Grooming Day Care Boarding Calculate the break-even for target profits: Grooming Day Care Boarding ACC202 – MANAGERIAL ACCOUNTING COS Schedule Income Statement Create an Income Statement. Revenue will be provided at the end of week 4. 3. Variances Calculate for the Grooming line: Direct Labor Time Variance Direct Labor Rate Variance Direct Materials Efficiency Variance Direct Materials Price Variance nd of week 4. ACC202 – MANAGERIAL ACCOUNTING Southern New Hampshire University College of Continuing Education (COCE) ACC 202 – 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 and variable cost designation is provided. VARIABLE AND FIXED COSTS Determine your per-unit cost per dog for grooming, day care, and boarding. OPERATIONAL AND 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 ACC202 – MANAGERIAL ACCOUNTING 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 among the services (grooming, day care, boarding) ACC202 – MANAGERIAL ACCOUNTING SALARY & HIRING DATA Groomer – $12.00 an hour, 40 hours a week Day Care Attendant – $9.00 per hour, 22 days per month, 8 hours a day Receptionist – $8.50 per hour, 30 hours a week Kennel Attendant – $11.50 per hour, 22 days per month, 8 hours a day 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 and 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 will 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 ACC202 – MANAGERIAL ACCOUNTING ACC202 – MANAGERIAL ACCOUNTING HOME MILESTONE 1 – Company Profile Company Name Shampooches grooming Location Santa Clara, California Vision Providing quality care for pets in a stress-free and fun environment. Mission Establishing a worthy, trust, and cleanest relation with clients ACC202 – MANAGERIAL ACCOUNTING HOME Shampooches grooming MILESTONE 1 – Cost Classification Exercise INSTRUCTIONS: Classify each item or cost as: Direct Material, Direct Labor, Manufacturing Overhead, or Period Costs. Place an X in the appropriate column. No numbers are needed. The fixed and variable cost classifications have been provided for you. For more information, see Objective 1 in Chapter 5. Item/Cost Groomer Day care attendant Receptionist Kennel attendant Food and water bowls Fencing for day care area Installation of fencing Dog grooming arm (attaches to table) 12 kennels cost Depreciation on kennels Rent Utilities and insurance Grooming table Grooming tub 48″ Heating system Depreciation on heating system Clippers Shampoo (Crystal Clear: five-gallon pail) Cage bank (set of five) Salon Tuff Capri mobile carry cart Towels Scissors (7-inch straight, ear & nose) Toys (used in day care only) Cleaning products (used throughout) Dryer Rubberized flooring (day care) Loan Draw Direct Material Direct Labor Manufacturing Overhead Period Costs X X Fixed Variable X X X x X x X x x x x x x x x x x x X X X X X X x x X x x x x X X x x x ACC202 – MANAGERIAL ACCOUNTING X X X HOME Paw Friendly Spa MILESTONE 1 – Variable and 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. Most costs are provided for you. Only fill in the missing costs. Based on 5 grooms per day GROOMING Item Variable Costs Item Fixed Costs Shampoo Clipper(s) Bowls Towels Scissors $ 1.04 1.37 0.72 5.83 1.01 Groomer Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw $ 2,080.01 30.95 20.00 28.57 3.95 2.08 2.36 200.00 Total Variable Costs $ 9.97 Total Fixed Costs $ 2,367.92 Based on 22 dogs per day, 25 operating days for day care, and 22 eight-hour work days for day care attendant. DAY CARE Item Variable Costs Item Fixed Costs Day care attendant Toys Bowls Towels $ 2.88 0.27 0.19 1.40 Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw $ 232.14 150.00 214.29 29.64 15.59 16.78 200.00 Total Variable Costs $ 4.74 Total Fixed Costs $ 858.44 Based on 12 dogs per day, 30 operating days for boarding, and 22 eight-hour work days for kennel attendant. BOARDING Item Variable Costs Item Fixed Costs Kennel attendant Bowls Towels $ 5.62 0.86 0.87 Depreciation on kennels Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw $ 80.00 386.90 250.00 357.14 49.40 25.98 29.55 200.00 Total Variable Costs $ 7.35 Total Fixed Costs $ 1,378.97 ACC202 – MANAGERIAL ACCOUNTING Southern New Hampshire University College of Continuing Education (COCE) ACC 202 – Managerial Accounting HOME 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 and 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 Shampooches grooming MILESTONE 2 – Contribution Margin per Unit and Contribution Margin Ratio GROOMING 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. BOARDING Sales Price $ Variable Cost per Unit Contribution Margin% Contribution Margin $ Total #of dogs per day Total contribution margin Sales for 1 month 25.00 9.97 60% 15.03 5 $75.15 Sales for 1mth DAY CARE Sales Price Variable Cost per Unit Contribution Margin% Contribution Margin Total # of dogs per day $ $ Total contribution margin Total sales for one month DAY CARE $125.00 75.15 3,750 Sales price Variable cost per unit Contribution Margin% Contribution Margin Total #of dogs per day Total contrib margin BOARDING GROOMING Sales Price Variable Cost per Unit $ 18.00 4.74 $ 25.00 7.35 $ 25.00 9.97 Contribution Margin $ 13.26 $ 17.65 $ 15.03 (Sales – Variable expenses) ÷ Sales ACC202 – MANAGERIAL ACCOUNTING 18.00 4.74 74% 13.26 22 291.5 396 291.5 396 11,880 $ 25.00 7.36 71% $ 17.64 12 211.68 300 211.68 9,000.00 HOME Shampooches grooming MILESTONE 2 – Break-Even Analysis Grooming 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) Target Profit 65.00 $ Break-Even Units (round up) Target Profit Break-Even Units (round up) 417.00 78.00 $ 96.00 $ 667.00 115.00 583.00 158.00 $ 111.00 $ 909.00 130.00 1,000.00 224.00 $ 1,500.00 257.00 Day Care Fixed Costs $ Contribution Margin % Contribution Margin $ 60% 2,368 Break-Even Sales = $ Break-Even Units = 3,946.53 158 15.03 $ 1,000 Target Profit Break-Even Sales = $ Break-Even Units = $ 1,500 Target Profit Break-Even Sales = $ Break-Even Units = Fixed Costs $ Contribution Margin % Contribution Margin $ 859 74% 13.26 Break-Even Sales = Break-Even Units = 1,161.34 65 $ $ 417 Target Profit 224 257 5,613 6,447 Sales based on 25.00 per unit Break-Even Sales = Break-Even Units = $ 1,725 96.2586727 $ 667 Target Profit Break-Even Sales = Break-Even Units = $ 2,063 115 Sales based on 18.00 per unit Boarding Fixed Costs $ Contribution Margin % 71% 1,379 Contribution Margin $ 17.64 Break-Even Sales = $ Break-Even Units = 1,942.24 78 $ 583 Target Profit Break-Even Sales = Break-Even Units = 2,763 111 $ 909 Target Profit Break-Even Sales = Break-Even Units = 3,223 130 Sales based on 25.00 per unit the break-even point in sales units: BEP (units)=Fixed cost/Contribution margin per unit the break-even point in sales units if the company desires a target profit of BEP (units)=(Fixed cost+desired profit)/Contribution margin per unit ACC202 – MANAGERIAL ACCOUNTING Southern New Hampshire University HOME College of Continuing Education (COCE) ACC 202 – 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. Data needed for the income statement will be shared in an announcement at the end of Module Four. COST OF SERVICES SCHEDULE (THIS IS THE SAME AS A COST OF GOODS MANUFACTURED SCHEDULE. THIS IS USED FOR SERVICE COMPANIES.) 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 COS Schedule. VARIANCES Use the data at the top of the schedule to calculate the following: Variance Favorable / Unfavorable ACC202 – MANAGERIAL ACCOUNTING HOME Shampooches grooming MILESTONE 3 – Statement of Cost of Goods Manufactured 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 Factory Overhead Factory Overhead was $2,800 Shampooches grooming Statement of Cost of Goods Manufactured For the Month Ended January 31, xxxx Beginning Work in Process Inventory Direct Materials: Materials – Beginning Add: Purchases for month of January $ $ Materials Available for Use Deduct: Ending Materials $ Materials Used in Production – 5,000 5,000.00 (3,000) $ 2,000.00 Direct Labor Factory Overhead 6,240 2,800 Total Manufacturing Overhead $ 11,040.00 $ 11,040 Deduct: Ending Work in Process Inventory Cost of Goods Manufactured ACC202 – MANAGERIAL ACCOUNTING HOME Income for January – actual activity based on price levels. For example, if you chose a grooming price of $25 per groom, the actual grooms in January were 4 per day. Assume a 30-day Grooming – price of $25 actual grooms were 4 per day; price of $30 – actual grooms were 3 per day; price of $35 – actual grooms were 2 per day Shampooches grooming MILESTONE 3 – Income Statement Daycare – price of $18 – 22 dogs were housed; price of $20 – 12 dogs were housed; at $25 – 9 dogs were housed (all per day) INSTRUCTIONS: Complete the Statement in proper form Revenue will be provided in an Announcement at the end of Module 4 Kennel – price of $25 – 12 dogs were housed; at $28 – 9 dogs were housed; at $30 – 6 dogs were housed (per day) (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 Shampooches grooming Income Statement For the Month Ended January 31, xxxx Revenue: Grooming Day Care Boarding Tota Revenue Cost of Goods Sold * Gross Profit Expenses: G&A Salaries Advertising Cleaning Products Depreciation Rent Loan Utilities and Insurance $ $ Total Expenses $ 11,040.00 (11,040.00) $ 3,173.00 1,200 100 120 83 650.00 420.00 600.00 Net Income / Loss * Cost of Goods Sold = Cost of Goods Manufactured (COGM). There is no finished goods inventory to maintain. ACC202 – MANAGERIAL ACCOUNTING HOME Shampooches grooming 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 Grooming Labor Grooming Materials Standard Actual Actual 150 $ 12.00 180 $ 11.50 1,000 $ 2.00 1,200 $ 3.00 Variance Favorable/ Groomer Direct Labor Time Variance (Actual Hours – Standard Hours) x Standard Rate $ 360.00 unfavorable Groomer Direct Labor Rate Variance (Actual Rate – Standard Rate) x Actual Hours $ 90.00 favorable Direct Materials Quantity/Efficiency Variance (Actual Quantity – Standard Quantity) x Standard Price $ 400.00 unfavorable Direct Materials Price Variance (Actual Price – Standard Price) x Actual Quantity $ 1,200.00 unfavorable ACC202 – MANAGERIAL ACCOUNTING … 

 
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