Question

6 MILESTONE 2 (Due in Module 4) MILESTONE 3 (Due in Module 5) MILESTONE 1 (Due in Module 2) 7 9 Instructions Milestone 2 10 12 1. Contribution Margin COGM Schedule .5 Name Choose a price range and calculate Grooming Create a Cost of Goods Manufactured Sched Location Vision Day Care Mission Bcarding 2. 2. 2. Break-Even Analysis Identify the following Create an Income Statement Calculate the break-even units Revenue will be provided end of week 4 Direct Materials Grooming Diret Labor Day Care Manufacturing Overhead Boarding Calculate the break-even for target profits Period Costs 3. Grooming 3. Variable & Fixed Costs Day Care Boarding Calculate for the Grooming line Direct Labor Time Variance Calculate the Variable & Fixed Costs for Grooming Direct Labor Rate Variance Day Care Direct Materials Efficiency Variance Direct Materials Price Variance Boarding Classifi instructions - Milestone 1 Instructions . 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 smali 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, boardi 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) 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 -$1455 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 ill dilute 1 oz to 1 gallon of water, Allocate based on square footage 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 Pet World Grooming Service 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. Wit . h 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. GROOMING BOARDING DAY CARE Sales Price per Unit Variable Cost per Unit Contribution Margin Pet World Grooming Service 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 Fixed Costs/Contribution Margin Break-even DAY CARE BOARDING GROOMING Sales Price Fixed Costs Contribution Margin Break-even Units (round up) 1,000.00 583.00 417.00 Target Profit Break-even Units (round up) 909.00 S 1,500.00 $ 667.00 Target Profit Break-even Units (round up)

Answer 1

Boardng 176 Day Care Grooming Sales Price Per Unit 18 25 Variable Cost Per Unit 4.65 7.36 178 9.97 179 Contribution Margin Per Unit 13.35 15.03 17.64 180 Boardng 181 Day Care Grooming Selling Price Per Unit 182 18 25 183 Fixed Cost 858.44 1,378.99 2,367.92 Contribution Margin 17.64 13.35 15.03 185 Breakevn Point in Units 858.44 1,378.99 2,367.92 187 17.64 13.35 15.03 188 189 Breakevn Point in Units 78 158 190 191 Target Profit 583 192 1000 417 193 Breakevn Point in Units 1378.99+583 2367.92+1000 858.44+417 17.64 13.35 15.03 195 196 197 1,275.44 1,961.99 3,367.92 17.64 198 13.35 15.03 199 Breakevn Point in Units 224

Target Profit 1500 202 667 909 2 203 Breakevn Point in Units 2367.92+1500 858.44+667 1378.99+909 13.35 17.64 15.03 206 2,287.99 3,867.92 17.64 13.35 15.03 209 reakevn Point in Units 114 210 130 257