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 St.Angels New York Vision To Serve the Society Sustainably Mission To be a world class entetrepreneur, serving the best interest of the society sustainably. ACC202 – MANAGERIAL ACCOUNTING HOME XYZ Corporation MILESTONE 1 – Cost Classification Exercise INSTRUCTIONS: Putting an X in the appropriate spot, classify the costs highlighted in yellow as: Direct Material, Direct Labor, Overhead, or Period Costs. Other costs have been provided for you. 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 Overhead Period Costs Fixed x Groomer x Day care attendant x Receptionist x Kennel attendant x x Food and water bowls x Depreciation on kennels x x Rent x Utilties and insurance x x Grooming tub 48″ x Depreciation on heating system Clippers Variable x x x Shampoo (Crystal Clear: five-gallon pail) Towels x x Scissors (7-inch straight, ear & nose) x x Toys (used in day care only) x Cleaning products (used throughout) x Dryer 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 $ 1.04 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 $ 2,080.00 30.95 20.00 28.57 3.95 2.08 2.36 200.00 $ 2,367.91 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 0.10 1.40 $ 4.65 Item Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw Total Fixed Costs Fixed Costs $ 232.14 150.00 214.29 29.64 15.59 16.78 200.00 $ 858.44 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 $ 5.62 0.86 0.87 $ 7.35 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 $ 80.00 386.90 250.00 357.14 49.40 25.98 29.55 200.00 $ 1,378.97 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 Sales Price per Unit Variable Cost per Unit $ 25.00 4.65 Contribution Margin $ 20.35 $ – $ 25.00 7.36 $ 17.64 $ ACC202 – MANAGERIAL ACCOUNTING GROOMING – $ 25.00 9.97 $ 15.03 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. Break-even = Fixed Costs / Contribution Margin DAY CARE Sales Price $ Fixed Costs Contribution Margin $ Break-even Units (round up) 20.35 $ 417.00 $ 667.00 75.00 GROOMING $ 17.64 $ 583.00 $ 909.00 139.00 ACC202 – MANAGERIAL ACCOUNTING 15.03 157.55 $ 111.00 $ 25.00 2,367.92 78.17 63.00 $ 25.00 1,378.99 42.18 Break-even Units (round up) Target Profit BOARDING $ 858.44 Break-even Units (round up) Target Profit 25.00 1,000.00 224.00 $ 1,500.00 257.00 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 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 XYZ Corporation MILESTONE 3 – Statement of Cost of Services 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 XYZ Corporation 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 0 $ Materials Available for Use Deduct: Ending Materials 0 5,000 5,000 3,000 Materials Used $ Direct Labor Overhead 2,000 6,240 2,800 Total Service Costs $ Deduct: Ending Work in Process Inventory 11,040 0 Cost of Services $ * Cost of Goods Sold = Cost of Services There is no finished goods inventory to maintain. ACC202 – MANAGERIAL ACCOUNTING 11,040 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 $ 3,000 11,880 9,000 Tota Revenue Cost of Services * Gross Profit $ $ 23,880 11,040 12,840 Total Expenses $ 3,173 Net Income / Loss $ 9,667 Expenses: G&A Salaries Advertising Cleaning Products Depreciation Rent Loan Utilities and Insurance $ 1,200 100 120 83 650 420 600 * Cost of Goods Sold = Cost of Services 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 Variance Favorable/ Unfavorable 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) Unfavarable Direct Materials Quantity/Efficiency Variance (Actual Quantity – Standard Quantity) x Standard Price $ 400.00 Favorable Direct Materials Price Variance (Actual Price – Standard Price) x Actual Quantity $ 600.00 Favorable ACC202 – MANAGERIAL ACCOUNTING ACC 202 Final Project Guidelines and Rubric Overview Successful entrepreneurs understand all aspects of business, especially costs and costing systems. Managerial accounting provides a framework for strategic analysis and planning with regard to cost behaviors and costing systems. In this final project, you have the opportunity to act as an entrepreneur and apply managerial accounting principles to evaluate and manage costs related to your products within a costing system. Additionally, you will demonstrate your ability to communicate your findings effectively to internal stakeholders, just as an actual business owner would need to do. Specifically, you will assume the role of the owner of a hypothetical small business. In your milestone work, you will develop financial strategies prior to opening your business. For the final submission, you will create a presentation for your investors after your business has been in operation for a certain period of time. You will use the provided scenarios to complete your project. The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules Two, Four, and Five. The final product will be submitted in Module Seven. In this assignment, you will demonstrate your mastery of the following course outcomes:    ACC-202-01: Apply fundamental costing systems to optimize operations within a business ACC-202-02: Assess financial performance to communicate financial planning strategies to internal stakeholders ACC-202-03: Leverage fundamental managerial accounting methods to support the mission of an organization Prompt In a detailed PowerPoint presentation (12 to 15 slides in length, plus speaker notes and an addendum), explain and defend your costing strategies (i.e., the business plan created in your first and second milestones) and share your business’s performance to-date (i.e., the work from your third milestone). Be sure to effectively communicate to your stakeholders by breaking down concepts and using investor-friendly language to build their trust and confidence. Specifically, the following critical elements must be addressed. Most of the critical elements align with a particular course outcome (shown in brackets). I. Introduce your presentation A. Outline your company’s profile, including its name, location, and mission and vision. B. Explain for your investors the purpose of the presentation. What do you plan to communicate, and why should your investors pay attention? In other words, try to persuade your investors that the accounting information you are about to share is important. [ACC-202-03] C. Explain and defend your methods for generating the information that you are about to share in terms of your adherence to industry standards and the AICPA code of ethics. In other words, why should your investors trust that you are delivering accurate financial data and that your decision-making process has been ethical? [ACC-202-03] 1 D. Specifically, be sure to illustrate how your managerial accounting methods support the mission of your organization, using examples. [ACC-20203] II. Financial Strategy: Review your original business plan and costing strategies using the prior-to-opening scenario information. A. Justify your use of job order costing. Be sure to compare and contrast the various costing systems you learned about in this course as part of your defense. [ACC-202-01] B. Explain and defend the selling prices that you established for grooming, day care, and boarding. Be sure to reference your cost-volume-profit analysis in your defense. [ACC-202-02] C. Explain and defend your selected target profits for each area of your business. Be sure to reference your cost-volume-profit analysis in your defense. [ACC-202-02] D. Explain and defend your contribution margin per unit and contribution margin ratio. Be sure to reference your cost-volume-profit analysis in your defense. [ACC-202-02] III. Financial Statements: Assess your financial performance to-date using the post-opening scenario information. A. Financial Statements 1. Share the statement of cost of services and logically interpret the business’s performance against the provided benchmarks. [ACC-20202] 2. Share the income statement and logically interpret the business’s performance against the provided benchmarks. [ACC-202-02] B. Variance Analysis 1. Identify all variances for the direct labor time and the materials price. [ACC-202-02] 2. Evaluate the significance of the variances in terms of the potential to impact future budgeting decisions and planning. [ACC-202-02] IV. In an addendum, submit your completed workbook, including the following: A. Accurately classify all of your costs in the “Cost Classification” tab. [ACC-202-01] B. Conduct a cost-volume profit analysis: 1. Determine your contribution margin per unit and contribution margin ratio in the “Contribution Margin Analysis” tab. [ACC-202-01] 2. Determine your break-even points for achieving your target profits in the “Break-even analysis” tab. [ACC-202-01] Milestones …