Managerial Accounting

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Milestone 2: Tabs 4& 5 (Contribution Margin Analysis & Break Even Analysis)

Milestone Three:

In this third milestone, you will respond to an updated scenario in which your business has opened and you need to report on your progress to your investors. You will complete your workbook based on the provided information. Submit Milestone Three - the cost of goods manufactured statement, income statement, and variance analysis. All the information is given for the COGM statement. Period costs are given for the income statement. In the Module Four, you posted the actual number of services based on price points. You will use those to calculate revenue. Examples of an income statement and COGM statement are provided in Section 1-4b in Chapter 1. For the variance analysis, you are given standards and actuals for grooming labor and grooming materials. Variance analysis is discussed in Sections 8-3a and 8-3b in Chapter 8.

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Southern New Hampshire University College of Continuing Education (COCE) ACC202 - 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 & Fixed Costs Calculate the Variable & 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 Goods Manufactured 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 COGM Schedule Income Statement Create an Income Statement Revenue will be provided 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 ured Schedule ACC202 - MANAGERIAL ACCOUNTING Southern New Hampshire University HOME 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 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 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) ACC202 - MANAGERIAL ACCOUNTING Southern New Hampshire University HOME 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) 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 ACC202 - MANAGERIAL ACCOUNTING ACC202 - MANAGERIAL ACCOUNTING HOME MILESTONE 1 - Company Profile Compnay Name XYZ Corporation Location Vision Mission ACC202 - MANAGERIAL ACCOUNTING HOME XYZ Corporation MILESTONE 1 - Cost Classification Exercise INSTRUCTIONS: Classify each item or cost as: Direct Material, Direct Labor, Manufacturing Overhead or Period Costs. The fixed and variable cost classifications have been provided for you. For more information see Objective 1 in Chapter 5. Item/Cost Direct Material Direct Labor Manufacturing Overhead Period Costs 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 Utilties 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 Fixed Variable X X X X X X X X X X X X X X X X ACC202 - MANAGERIAL ACCOUNTING HOME XYZ Corporation MILESTONE 1 - Variable & 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. Based on 5 grooms per day GROOMING Item Shampoo Clipper(s) Bowls Towels Scissors Total Variable Costs Variable Costs $ 1.37 0.72 5.83 1.01 $ 9.97 Item Groomer Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw Total Fixed Costs Fixed Costs $ 30.95 20.00 28.57 3.95 2.08 2.36 200.00 $ 2,367.92 Based on 22 dogs per day for six days a week. Assume 25 operating days for kennel and 22 eight-hour work days for kennel attendant. DAY CARE Item Day care attendant Toys Bowls Towels Total Variable Costs Variable Costs $ 2.88 0.27 0.19 1.40 $ - Item Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw Total Fixed Costs Fixed Costs $ 232.14 150.00 29.64 15.59 17.73 200.00 $ 859.39 Based on 12 dogs per day. Assume 22 eight-hour work days for kennel attendant. BOARDING Item Kennel attendant Bowls Towels Total Variable Costs Variable Costs $ 0.86 0.87 $ 7.36 Item Depreciation on kennels Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw Total Fixed Costs ACC202 - MANAGERIAL ACCOUNTING Fixed Costs $ 80.00 386.90 250.00 49.40 25.98 29.55 200.00 $ 1,378.99 Southern New Hampshire University College of Continuing Education (COCE) ACC202 - 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 & 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 XYZ Corporation 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. 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 Variable Cost per Unit $ - $ - $ - Contribution Margin $ - $ - $ - ACC202 - MANAGERIAL ACCOUNTING HOME XYZ Corporation 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. Round all decimals UP to next whole number. Break-even = Fixed Costs / Contribution Margin DAY CARE BOARDING GROOMING Sales Price $ - $ - $ - Fixed Costs $ - $ - $ - Contribution Margin $ - $ - $ - Break-even Units (round up) Target Profit - $ Break-even Units (round up) Target Profit Break-even Units (round up) 417.00 - $ - $ 667.00 - 583.00 - $ - $ 909.00 - ACC202 - MANAGERIAL ACCOUNTING 1,000.00 - $ 1,500.00 - Southern New Hampshire University HOME 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 Data needed for the Income Statement will be shared in an Announcement at the end of Module Four COST OF GOODS MANUFACTURED (COGM) 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 COGM Schedule VARIANCES Use the data at the top of the schedule to calculate the following: Variance Favorable / Unfavorable ACC202 - MANAGERIAL ACCOUNTING HOME XYZ Corporation 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 XYZ Corporation 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 $ - $ - $ - $ - Direct Labor Factory Overhead Total Manufacturing Overhead $ Deduct: Ending Work in Process Inventory Cost of Goods Manufactured - $ ACC202 - MANAGERIAL ACCOUNTING - HOME XYZ Corporation MILESTONE 3 - Income Statement 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 XYZ Corporation Income Statement For the Month Ended January 31, xxxx Revenue: Grooming Day Care Boarding $ - Tota Revenue Cost of Goods Sold * Gross Profit $ - Total Expenses $ - Net Income / Loss $ - Expenses: G&A Salaries Advertising Cleaning Products Depreciation Rent Loan Utilities and Insurance $ $ - * Cost of Goods Sold = Cost of Goods Manufactured (COGM). There is no finished goods inventory to maintain. ACC202 - MANAGERIAL ACCOUNTING HOME XYZ Corporation 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 Hours / Qty Grooming Labor Grooming Materials Standard Rate Actual Hours / Qty Actual Rate 150 $ 12.00 180 $ 11.50 1,000 $ 2.00 1,200 $ 3.00 Favorable/ Unfavorable Variance Groomer Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate $ - Groomer Direct Labor Time Variance (Actual Rate - Standard Rate) x Actual Hours $ - Groomer Direct Labor Time Variance (Actual Quantity - Standard Quantity) x Standard Price $ - Groomer Direct Labor Time Variance (Actual Price - Standard Price) x Actual Quantity $ - ACC202 - MANAGERIAL ACCOUNTING Overview: In the second milestone of your final project, you will complete your pre-opening strategy. You must analyze the cost behaviors and systems of your industry and then conduct the relevant financial calculations to determine appropriate costing solutions. Be sure to use your work from Milestone One to inform your analysis and proposals. Scenario: Prior to Opening, Part II: Your market research indicated the following price ranges as optimal for your area: Dog Day Care o With pricing at $18 per dog per day, you can expect to have 22 dogs per day. o With pricing at $20 per dog per day, you can expect to have 15 dogs per day. o With pricing at $25 per dog per day, you can expect to have 10 dogs per day. . Overnight Boarding o With pricing at $25 per dog per day, you can expect to have 12 dogs per day. o With pricing at $28 per dog per day, you can expect to have 10 dogs per day. o With pricing at $30 per dog per day, you can expect to have 7 dogs per day. c Basic Groom o With pricing at $25 per groom, you can expect to do 5 grooms per day. o With pricing at $30 per groom, you can expect to do 4 grooms per day. o With pricing at $35 per groom, you can expect to do 3 grooms per day. Additionally, you need to compare your break-even points for the following target profits for each area of your business: O Day Care Break-even o $417 target profit each month $667 target profit each month o . O Boarding Break-even o $583 target profit each month o $909 target profit each month O Grooming Break-even o $1,000 target profit each month o $1,500 target profit each month Prompt: Continue your work in your provided workbook by conducting a cost-volume profit analysis, specifically addressing the following critical elements: Determine your contribution margin per unit and contribution margin ratio in the "Contribution Margin Analysis” tab. Determine your break-even points for achieving your target profits in the "Break-Even Analysis" tab. Incorporate all feedback from Milestone One. Rubric Guidelines for Submission: Your workbook submission should have the first five tabs completed according to the formats in the provided templates within each sheet. Value 40 40 Critical Elements Proficient (100%) Needs Improvement (55%) Not Evident (0%) Contribution Margin Determines the contribution Determines the contribution Does not determine the margin per unit and contribution margin per unit and contribution contribution margin per unit and margin ratio in the "Contribution margin ratio in the "Contribution contribution margin ratio in the Margin Analysis" tab of the Margin Analysis" tab of the "Contribution Margin Analysis" workbook workbook, but fails to fully or tab of the workbook accurately complete the analysis Break-Even Points Determines the break-even Determines the break-even Does not determine the break- points for achieving the target points for achieving the target even points for achieving the profits in the "Break-Even profits in the "Break-Even target profits in the "Break-Even Analysis" tab of the workbook Analysis" tab of the workbook, Analysis" tab of the workbook but fails to fully or accurately complete the analysis Incorporate All Incorporates feedback from Fails to incorporate all feedback Feedback Milestone One into the first from Milestone One into the first three tabs of the workbook three tabs of the workbook Total 20 100% ACC 202 Milestone Three Guidelines and Rubric Overview: In the third milestone, you will jump forward in time: Imagine that your business has already opened. Use the updated scenario information to analyze your company's performance. Post-opening Scenario: Your angel investors are silent in relation to the business; however, they require board meetings for status updates on the company's financial health. Therefore, you need to analyze your company's performance over the last month using the data provided below. Note: Your instructor will create an announcement sharing the income statement data by the end of Module Four. All of the data you need for the cost-of- goods-manufactured statement can be found in the "COGM Schedule" tab of your workbook. For your variance analysis, use the following financial data: Grooming labor Standard Hours Standard Rate Actual Hours Actual Rate 150 $12 180 $11.50 Grooming Materials Standard Quantity Standard Price Actual Quantity Actual Price 1000 $2 1200 $3 Prompt: Complete your work in the provided workbook by assessing your company's financial performance, specifically addressing the following critical elements: Financial Statements Create a statement of cost of goods manufactured in the "COGM Schedule" tab. Create an income statement in the "Income Statement" tab. 0 Variance Analysis o Identify all variances for the direct labor time and the materials price in the "Variances" tab. Evaluate the significance of the variances in the "Variances” tab. o Incorporate all feedback from previous milestones to finalize your workbook Guidelines for Submission: You must submit a complete workbook, following the formats in the provided templates within each sheet. Value 25 25 Critical Elements Proficient (100%) Needs Improvement (55%) Not Evident (0%) Statement of Cost of Creates the statement of cost of Creates the statement of cost of Does not create the statement of Goods Manufactured goods manufactured using the goods manufactured, but does cost of goods manufactured provided benchmarks not fully or accurately complete the task given the provided benchmarks Income Statement Creates the income statement Creates the income statement, Does not create the income using the provided benchmarks but does not fully or accurately statement complete the task given the provided benchmarks Identify All Variances Accurately identifies all variances Identifies variances for the direct Does not identify variances for for the direct labor time and the labor time and the materials the direct labor time and the materials price price, but fails to fully or materials price accurately identify each Significance of the Evaluates the significance of the Indicates the significance of the Does not evaluate the Variances variances variances, but fails to fully or significance of the variances accurately identify their implications Total 25 25 100%
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Southern New Hampshire University
College of Continuing Education (COCE)
ACC202 - 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 & Fixed Costs
Calculate the Variable & 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 Goods Manufactured 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

COGM Schedule

Income Statement
Create an Income Statement
Revenue will be provided 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

ured Schedule

ACC202 - MANAGERIAL ACCOUNTING

Southern New Hampshire University

HOME

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
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 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)

ACC202 - MANAGERIA...


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Really helpful material, saved me a great deal of time.

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