Question

GENERAL Use data from Milestone 1 and Milestone 2 in your analysis Revenue data needed for the Income Statement will be provided 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 INSTRUCTIONS: MILESTONE 1 Determine the per unit cost for each dog. Fill in the blanks to get the per unit cost and fised cost of each service Based on 5 grooms per day GROOMING Yariable Costs Item Item Fized Costs Shampoo Clipper(s) 1.04 Groomer 2,080.00 137 Rent 30.95 Bowls 0.72 Loan 20.00 Towels 5.83 Utilities and Insurance 28,57 Depreciation on heating system Cleaning Produots: Odoban Cleaning Products: Simple Green Scissors 1,01 3.95 2,08 2.36 Draw 200,00 2,367.91 Total Variable Costs 9.97 Total Fized Costs Based on 22 doqs per day for sis days a week. Assume 25 operating days for kennel and 22 eight-hour work days for kennel attendant. DAY CARE Fized Costs Item Yariable Costs Item Day care attendant 2,88 Rent 232.14 Toys 0.27 Loan 150,00 Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Bowls 0.10 214.29 Towels 1,40 29.64 15.59 Cleaning Products: Simple Green 16.78 Draw 200,00 4.65 Total Yariable Costs $ Total Fized Costs 858.44 Based on 12 dogs per day. Assume 22 eight-hour work days for kennel attendant. BOARDING Item Yariable Costs Item Fized Costs Kennel attendant 5,62 Depreciation on kennels 80,00 Bowls 0.86 Rent 386.90 0.87 Towels Loan 250,00 Utilities and Insurance 357.14 Depreciation on heating system 49.40 Cleaning Products: Odoban Cleaning Products: Simple Green 25.98 29,55 Draw 200,00 1,378.97 Total Variable Costs 7.35 Total Fized Costs 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): MILESTONE 2 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 4.65 7.35 9.97 Contribution Margin S S S 13.35 17.65 15.03 MILE STONE 2 BOARDING DAY CARE GROOMING Sales Price 25.00 18.00 25.00 Fixed Costs S S S 858 1,379 2,368 Contribution Margin S S 13.35 17.65 15.03 Break-even Units (round up) 79.00 65.00 158.00 S S Target Profit 417.00 583.00 1,000.00 Break-even Units (round up) 96.00 112.00 225.00 Target Profit S S 667.00 909.00 1,500.00 Break-even Units (round up) 115.00 130.00 258.00 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. .. The actual #of grooms/daycare/kennel Grooming price $25 4 grooms per day Grooming price $30 3 grooms per day REVENUE DATA Grooming price $35 2 grooms per day Daycare price $18 22 dogs per day Daycare price $20 12 dogs per day 9 dogs per day Daycare price $25 Kennel price $25 12 dogs per day Kennel price $28 9 dogs per day Kennel price $30 6 dogs per day 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 Statement of Cost of Services 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 S Direct Labor Overhead Total Service Costs Deduct: Ending Work in Process Inventory C Cost of Services Cost of Goods Sold Cost of Services There is no finished goods inventory to maintain. 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 Income Statement For the Month Ended January 31, xxxx Revenue: Grooming Day Care Boarding S Tota Revenue Cost of Services Gross Profit S Expenses G&A Salaries Advertising Cleaning Products Depreciation Rent Loan Utilities and Insurance Total Expenses S Net Income / Loss S * Cost of Goods Sold =Cost of Services There is no finished goods inventory to maintain. 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: Actual Actual Standard Standard Hours Qty Hours Qty Rate Rate 180 S 12.00 Grooming Labor 150 11.50 1,000 $ 1,200 $ Grooming Materials 2.00 3.00 Favorable/ Variance Unfavorable Groomer Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate Groomer Direct Labor Rate Variance (Actual Rate Standard Rate) x Actual Hours Direct Materials Quantity/Efficiency Variance (Actual Quantity Standard Quantity) x Standard Price - Direct Materials Price Variance (Actual Price Standard Price)x Actual Quantity

Answer 1

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