ACC 202 Milestone Three Income Statement Revenue Information.docx

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. . . The actual # of grooms/daycare/kennel
Grooming price $25 4 grooms per day
Daycare price $18 22 dogs per day
Kennel price $25 12 dogs per day

You are required to formulate a 250-word argument for or
against each of two of the following
controversial statements.
1. Work-life balance is only of importance to mothers
2. The economic benefits of modern slavery outweigh any
reputational damage for firms
3. A person’s commitment to their job decreases as they age
4. A focus on managing diversity is incompatible with ensuring
equality at work.
Briefly summarized, an argument includes:
An assertion which responds to your chosen statement
Reason(s) why this assertion should be accepted; and
Evidence for why the reason(s) are valid/ convincing
It is not enough to just assert something, say it is important,
then add a reference. You will need to explain your reasoning
behind your thinking and support that with evidence why that
reason should be accepted as a good one.
In academic work, evidence is usually in the form of references
to high quality research, statistics, or views from other
reputable authorities (such as industry bodies or trade unions
for example). You should include one list of references at the
end of your two 250-word arguments. Remember you can
complete this assignment to a high standard even if you do not
feel sure of your personal position on the issue – think of the
number of lawyers who know their client is guilty, but still
mount a case for their innocence anyway!

1
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:
-202-01: Apply fundamental costing systems to optimize
operations within a business
-202-02: Assess financial performance to communicate
financial planning strategies to internal stakeholders
-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]
2
D. Specifically, be sure to illustrate how your managerial
accounting methods support the mission of your organization,
using examples. [ACC-202-
03]
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-202-
02]
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
Milestone One: First Part of Workbook
In Module Two, you will submit the “Cost Classifications” and
“Variable_Fixed” tabs in your provided final project workbook.
This milestone will be graded with
the Milestone One Rubric.
3
Milestone Two: Second Part of Workbook
In Module Four, you will submit the “Contribution Margin
Analysis” and “Break-even Analysis” tabs in your provided
final project workbook. This milestone will
be graded with the Milestone Two Rubric.
Milestone Three: Final Workbook
In Module Five, you will submit “COS Schedule,” “Income
Statement,” and “Variances” tabs in your provided final project
workbook. This milestone will be
graded with the Milestone Three Rubric.

Final Submission: Presentation to Investors
In Module Seven, you will submit your final project. It should
be a complete, polished artifact containing all of the critical
elements of the final prompt. It should
reflect the incorporation of feedback gained throughout the
course. This submission will be graded with the Final Project
Rubric.
Deliverables
Milestone Deliverable Module Due Grading
One Cost Classification Tabs Two Graded separately; Milestone
One Rubric
Two Financial Scope of the Business Plan Four Graded
separately; Milestone Two Rubric
Three Draft Presentation to Investors Five Graded separately;
Milestone Three Rubric
Final Submission: Presentation to Investors Seven Graded
separately; Final Project Rubric
Final Project Rubric
Guidelines for Submission: Your PowerPoint presentation to
investors must be at least 12–15 slides plus speaker notes, and
all citations should follow APA
formatting. In addition, submit completed Excel workbook.
Critical Elements Exemplary Proficient Needs Improvement
Not Evident Value

Introduce:
Company’s Profile
Meets “Proficient” criteria and
judiciously includes details
relevant to the target audience
of the presentation (100%)
Outlines the company’s profile,
including its name, location,
and mission and vision (85%)
Outlines the company’s profile
but fails to include its name,
location, and mission and vision
(55%)
Does not outline the company’s
profile (0%)
3
4
Introduce: Purpose
[ACC-202-03]
demonstrates nuanced
appreciation for the role of
managerial accounting in
ethically supporting the mission
of an organization (100%)

Explains the purpose of the
presentation, including a
persuasive case for the
importance of the accounting
information to be shared (85%)
Explains the purpose of the
presentation, but fails to fully
or persuasively make a case for
the importance of the
accounting information (55%)
Does not explain the purpose of
the presentation (0%)
7
Introduce: Defend of
Methods
[ACC-202-03]
Explains and defends the
methods for generating the
information in the presentation
in terms of their adherence to
industry standards and the
AICPA code of ethics (85%)

Explains the methods for
generating the information in
the presentation, but fails to
fully defend the methods in
terms of their adherence to
industry standards and the
AICPA code of ethics (55%)
Does not explain the methods
for generating the information
in the presentation (0%)
7
Introduce: Support
the Mission
[ACC-202-03]
Illustrates how the managerial
accounting methods support
the mission of the organization
using specific examples (85%)
Discusses how the managerial
accounting methods support
the mission of the organization,
but fails to fully or accurately

illustrate using specific
examples (55%)
Does not discuss illustrate how
the managerial accounting
methods support the mission of
the organization (0%)
7
Financial Strategy:
Costing Systems
[ACC-202-01]
demonstrates keen insight into
key cost behaviors and cost
systems (100%)
Justifies the use of job order
costing by comparing and
contrasting the various costing
systems covered in the course
(85%)
Discusses the use of job order
costing but fails to fully or
accurately justify its use by
comparing and contrasting the
various costing systems
covered in the course (55%)
Does not discuss the use of job
order costing (0%)

6
Financial Strategy:
Selling Prices
[ACC-202-02]
demonstrates strategic ability
to propose costing solutions
supported by the financial data
(100%)
Explains and defends the selling
prices for grooming, day care,
and boarding by citing financial
data from the cost-volume-
profit analysis (85%)
Explains the selling prices for
grooming, day care, and
boarding, but fails to fully or
accurately defend each price by
citing financial data from the
cost-volume-profit analysis
(55%)
Does not explain the selling
prices for grooming, day care,
and boarding (0%)
8
Financial Strategy:
Target Profits
[ACC-202-02]

(100%)
Explains and defends the target
profits for each area of the
business by citing financial data
from the cost-volume-profit
analysis (85%)
Explains the target profits for
each area of the business, but
fails to fully or accurately
defend each one by citing
financial data from the cost-
volume-profit analysis (55%)
Does not explain the target
profits for each area of the
business (0%)
8
5
Financial Strategy:
Contribution Margin
[ACC-202-02]

(100%)
Explains and defends the
contribution margin per unit
and contribution margin ratio
by citing financial data from the
cost-volume-profit analysis
(85%)
Explains the contribution
margin per unit and
contribution margin ratio, but
fails to fully or accurately
defend each by citing financial
data from the cost-volume-
profit analysis (55%)
Does not explain the
and contribution margin ratio
(0%)
8
Financial
Statements:
Statement of Cost of
Services
[ACC-202-02]

demonstrates sophisticated
ability to evaluate critical
performance measures for
strategic planning (100%)
Shares the statement of cost of
services and logically interprets
the business’s performance
against the provided
benchmarks (85%)
Shares the statement of cost of
services, but there are
inaccuracies in the statement,
or the interpretation has gaps
in logic or fails to address the
provided benchmarks (55%)
Does not share the statement
of cost of services (0%)
6
Financial
Statements: Income
Statement
[ACC-202-02]
Shares the income statement

and logically interprets the
business’ performance against
the provided benchmarks (85%)
Shares the income statement,
but there are inaccuracies in
the statement or the
interpretation has gaps in logic
or fails to address the provided
benchmarks (55%)
Does not share the income
statement (0%)
6
Variance Analysis:
Identify
[ACC-202-02]
Accurately identifies all
variances for the direct labor
time and the materials price
(85%)
Identifies variances for the
direct labor time and the
materials price, but fails to fully
or accurately identify each

(55%)
Does not identify variances for
the direct labor time and the
materials price (0%)
6
Variance Analysis:
Significance of the
Variance
[ACC-202-02]
Evaluates the significance of
the variances in terms of their
potential to impact future
budgeting decisions and
planning (85%)
Evaluates the significance of
the variances, but fails to fully
or accurately identify their
potential to impact future
budgeting decisions and
planning (55%)
Does not evaluate the
significance of the variances
(0%)

7
Addendum: Classify
Costs
[ACC-202-01]
Accurately classifies all costs in
the “Cost Classification” tab of
the workbook (100%)
Classifies costs in the “Cost
Classification” tab, but fails to
fully or accurately classify each
(55%)
Does not classify costs in the
“Cost Classification” tab of the
workbook (0%)
6
6
Addendum:
Contribution Margin
[ACC-202-01]
Determines the contribution
margin per unit and
contribution margin ratio in the

“Contribution Margin Analysis”
tab of the workbook (100%)
Determines the contribution
margin per unit and
contribution margin ratio in the
“Contribution Margin Analysis”
tab of the workbook, but fails
to fully or accurately complete
the analysis (55%)
Does not determine the
and contribution margin ratio in
the “Contribution Margin
Analysis” tab of the workbook
(0%)
6
Addendum: Break-
Even Points
[ACC-202-01]
Determines the break-even
points for achieving the target
profits in the “Break-even
analysis” tab of the workbook
(100%)
Determines the break-even
points for achieving the target
profits in the “Break-even
analysis” tab of the workbook,
but fails to fully or accurately

complete the analysis (55%)
Does not determine the break-
even points for achieving the
target profits in the “Break-
even analysis” tab of the
workbook (0%)
6
Effective Business
Communication
[ACC-202-02]
ability to effectively
communicate to internal
stakeholders (100%)
Main ideas are clearly
communicated and references
are properly cited throughout
the presentation (85%)
There are minor issues with the
communication of ideas or use
of citations that negatively
impact the effectiveness of the
presentation (55%)
There are critical errors in the
communication of ideas that
negatively impact basic
comprehension of the

presentation (0%)
3
Total 100%
7
Appendix
Scenario: Prior to Opening, Part I: You plan to open a pet-
services business that will offer dog grooming, day care, and
boarding. You can be creative in deciding
the name of your business (e.g., “Inspiring Dog Care”), its
geographical location (e.g., Chicago), and its mission and vision
for adding value to the community. You
will be asked to make choices for a few other details to
customize your case; otherwise, you should use the information
below.
There are 12 kennels (single dog only) and the day care area can
house 10 large dogs and 12 small dogs each day. The grooming
facility is 200 square feet, the
boarding facility is 2,500 square feet, and the day care is 1,500
square feet. Your groomer can groom five dogs a day for five
days a week; each groom consists of
1.5 labor hours. You also offer dog day care six days a week,
and kenneling every day. You have taken out a loan for start-up
costs and the monthly payment is

$420; it goes into effect immediately and should be accounted
for in your costs. With limited cash contribution and loan
funding, you located two angel
investors. You will collect a modest draw for the first year of
$600 a month; remember to divide evenly among the services.
Note: For simplicity, base all calculations using 30 days in each
month.
You estimate the following staffing needs:
week
ur and will work
22 eight-hour days per month
a week
work 22 eight-hour days per month
A complete list of additional costs is provided below:
o Daycare: Two bowls last for every 75 dogs that attend
daycare.
o Boarding: Two bowls last for every 100 dogs that are boarded;
you need two bowls per kennel.
o Grooming: Each bowl lasts for 20 grooms and you need four
bowls at all times.

$1,000
es/insurance: $600/month; allocate based on square
footage
8
based on square footage
-gallon pail, which can be used for
100 grooms
o Day care: You need to have 12 towels for every 25 dogs.
o Boarding: You need to have 12 towels for every 40 dogs.
o Grooming: You need to have two towels for every groom per

day.
-inch straight is $194.99, and (1) ear-and-nose
is $7.49; each can be used for 200 grooms.
-pack; one toy will last for two dogs in day
care, per day.
o Odoban: $14.55/gallon: Each area will dilute 1 oz to 1 gallon
of water; allocate based on square footage.
o Simple Green: $15.66/gallon: each area will dilute 1 oz to 1
gallon of water; allocate based on square footage.
Scenario: Prior to Opening, Part II: Your market research
indicated the following price ranges as optimal for your area:
o With pricing at $18 per dog per day, you can expect to have
22 dogs per day.
15 dogs per day.
10 dogs per day.
12 dogs per day.
10 dogs per day.

o With pricing at $30 per dog per day, you can expect to have 7
dogs per day.
o With pricing at $25 per groom, you can expect to do 5 grooms
per day.
per day.
per day.
Additionally, you need to compare your break-even points for
the following target profits for each area of your business:
9
o Break-even
o $417 target profit each month
o Break-even
o Break-even

o $1,000 target profit each month
o $1,500 target profit each month
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 “COS
Schedule” tab of your workbook.
For your variance analysis, use the following financial data:
Direct Materials/Labor Original Projection Actual
Shampoo 1000 ounces ($2/groom) 1200 ounces ($3/groom)
Grooming Labor 1.5 hrs/groom @ $12 2.25 hrs/groom @ $11.50
InstructionsSouthern New Hampshire UniversityCollege of
Continuing Education (COCE)ACC202 - Managerial
AccountingMILESTONE 1 (Due in Module 2)MILESTONE 2
(Due in Module 4)MILESTONE 3 (Due in Module
5)1.1.1.NameChoose a price range and calculate:Create a Cost
of Goods Manufactured ScheduleLocationGroomingVisionDay
CareMissionBoarding2.2.2.Identify the following:Calculate the
break-even unitsCreate an Income StatementDirect

MaterialsGroomingRevenue will be provided end of week
4Diret LaborDay CareManufacturing OverheadBoardingPeriod
CostsCalculate the break-even for target
profits3.Grooming3.Day CareCalculate the Variable & Fixed
Costs for:BoardingCalculate for the Grooming
line:GroomingDirect Labor Time VarianceDay CareDirect
Labor Rate VarianceBoardingDirect Materials Efficiency
VarianceDirect Materials Price Variance
ACC202 - MANAGERIAL ACCOUNTING
Company Profile/xl/drawings/drawing1.xml#CompanyProfile
Variable & Fixed
Costs/xl/drawings/drawing1.xml#VariableFixedCosts
Cost Classification
/xl/drawings/drawing1.xml#CostClassification
Contribution
Margin/xl/drawings/drawing1.xml#ContributionMargin
Break-Even
Analysis/xl/drawings/drawing1.xml#BreakevenAnalysis
COGM Schedule/xl/drawings/drawing1.xml#COGMSchedule
Income Statement/xl/drawings/drawing1.xml#COGMSchedule
Variances/xl/drawings/drawing1.xml#Variances
Instructions Milestone
1/xl/drawings/drawing1.xml#InstructionsMilestone1
2/xl/drawings/drawing1.xml#'Instructions%20-
%20Milestone%202'!InstructionsMilestone2
3/xl/drawings/drawing1.xml#'Instructions%20-
%20Milestone%203'!InstructionsMilestone3
Instructions - Milestone 1Southern New Hampshire
UniversityCollege of Continuing Education (COCE)ACC202 -
Managerial AccountingINSTRUCTIONS FOR MILESTONE 1
(Due Week 2)IMPORTANT NOTE:Make sure to completely
review the Rubric for Milestone 1Use 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):GENERALYou plan to open a pet
services business that will offer dog grooming, day care and
boardingCOMPANY PROFILE TABDetermine 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 communityCOST
CLASSIFICATIONAccurately classify all of your costs (direct
material, direct labor, manufacturing overhead, period
costs)Fixed & Variable cost designation is providedVARIABLE
& FIXED COSTSDetermine your per unit cost per dog for
grooming, day care and boardingOPERATIONAL & COST
INFORMATION:For simplicity, base all calculations using 30
days in each monthOPERATIONAL DATAGrooming:The
Groomer can groom 5 dogs a day, 5 days a weekEach grooming
takes 1.5 labor hoursDay Care:The Day Care can house 10 large
dogs and 12 small dogs daily.Day Care is offered 6 days a
weekBoarding:There are 12 kennels (single dog only).Boarding
(kennel services) is offered every dayFacilities:The Grooming
facility is 200 square feetThe Boarding facility is 2,500 square
feetThe Day Care facility is 1,500 square feetGeneral:Loan for
start-up costs - monthly payment of $420; in effect
immediately; limited cash and loan funding - used angel
investorsModest monthly draw of $600 a month for first year;
should be divided evenly amoung the services (grooming, day
care, boarding)SALARY & HIRING DATAGroomer (Allison) -
$12.00 an hour, 40 hours a weekDay Care Attendant (Beverly) -
$9.00 per hour, based on needReceptionist (Cathie) - $8.50 per
hour, 30 hours a weekKennel Attendant (Ben) - $11.50 per hour,
based on needOTHER COST DATAGrooming:Dog Grooming
Arm - $300.Grooming Table - $900Grooming Tub -
$2,800Clippers - $136.99; can be used for 100 groomsShampoo
- $103.96 per 5-gallon pail; can be used for 100 groomsSalon
Tuff Capri Mobile Carry Cart - $90Scissors (7 inch straight) -
$194.99; used for 200 groomsScissors (ear and nose) - $7.49;
used for 200 groomsDay Care:Fencing for Day Care area -

$1,249Fencing Installation - $1,000Toys - $3.29 per 6 pack;
one toy will last for two dogs in day care per dayRubberized
Flooring for Day Care - $3,800Boarding:12 Kennels;
Depreciation is $80 per monthGeneral:Food & Water bowls -
$3.59 per unitDay Care - two bowls last for every 75 dogs that
attend daycareBoarding - two bowls last for every 100 dogs
boarded; two bowls per kennelGrooming - each bowl lasts for
20 grooms and you need 4 bowls at all timesTowels - $34.99 per
12 packDay Care - 12 towels for every 25 dogsBoarding - 12
towels for every 40 dogsGrooming - 2 towels for every groom
per dayHeating System - $10,000; Depreciation is $83 per
month; Allocate based on square footageRent - $650 per month;
Allocate based on square footageUtilities / Insurance - $600 per
month; Allocate based on square footageCage Bank - $2,200 per
set of 5Dryer - $1,250Cleaning ProductsOdoban - $14.55 per
gallon; Each area wil dilute 1 oz to 1 gallon of water; Allocate
based on square footageSimple Green - $15.66 per gallon; Each
area will dilute 1 oz to 1 gallon of water; Allocate based on
square footage.
HOME/xl/drawings/drawing2.xml#Home
Company ProfileMILESTONE 1 - Company ProfileCompany
NameDoggie DelightsLocationAiken, SCVisionBecome the go
to facility for all dog lovers in the area to come to and provide
them with the best quailty services. Provide knowledge to all of
our employees in order to better serve and constantly improve
the quality of service we offer our pets and pet owners.
MissionOur mission is to care for your pet in the best way
possible when you can't. We provide a unique social experience
for dogs and create the a new standard for dog care. We have
set out to create a facility that we would want for our own furry
friends, making sure that it is a fun and safe place to play
during the day and secure at night. We also ensure that your pet
will receive the best quaility grooming treatments to make
things easier on you as a pet owner and allow youo to spend

more quality time with your furry friend!
Cost ClassificationDoggie DelightsMILESTONE 1 - Cost
Classification ExerciseINSTRUCTIONS: 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/CostDirect
MaterialDirect
Labor
OverheadPeriod Costs FixedVariableGroomerxxDay care
attendantxxReceptionistxxKennel attendantxxFood and water
bowlsxxDepreciation on kennelsxxRentxxUtilties and
insurancexxGrooming tub 48"xDepreciation on heating
systemxxClippersxxShampoo (Crystal Clear: five-gallon
pail)xxTowels xxScissors (7-inch straight, ear & nose)xxToys
(used in day care only)xxCleaning products (used
throughout)xxDryerxDog Grooming ArmxFlooring for
daycarex12 KennelsxHeating SystemxSalon Tuff Capri Mobile
Carry CartxCage bankxgrooming TablexLoanxInstallation of
fencingxFencing for Daycare areax
&8ACC202 - MANAGERIAL ACCOUNTING
Variable_FixedDoggie DelightsMILESTONE 1 - Variable &
Fixed Cost ExerciseINSTRUCTIONS: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
dayGROOMINGItemVariable CostsItemFixed CostsShampoo$
1.04Groomer$
2,080.00Clipper(s)1.37Rent30.95Bowls0.72Loan20.00Towels5.
83Utilities and Insurance28.57Scissors1.01Depreciation on
heating system3.95Cleaning Products: Odoban2.08Cleaning

Products: Simple Green2.36Draw200.00Total Variable Costs$
9.97Total Fixed Costs$ 2,367.91Based 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
CAREItemVariable CostsItemFixed CostsDay care attendant$
2.88Rent$ 232.14Toys 0.27Loan150.00Bowls0.10Utilities and
Insurance214.29Towels1.40Depreciation on heating
system29.64Cleaning Products: Odoban15.59Cleaning Products:
Simple Green16.78Draw200.00Total Variable Costs$
4.65Total Fixed Costs$ 858.44Based on 12 dogs per day.
Assume 22 eight-hour work days for kennel
attendant.BOARDINGItemVariable CostsItemFixed
CostsKennel attendant$ 5.62Depreciation on kennels$
80.00Bowls0.86Rent386.90Towels0.87Loan250.00Utilities and
Insurance357.14Depreciation on heating system49.40Cleaning
Products: Odoban25.98Cleaning Products: Simple
Green29.55Draw200.00Total Variable Costs$ 7.35Total Fixed
Costs$ 1,378.97
MILESTONE (Green Tabs):GENERALUse data from Milestone
1 in your analysisCONTRIBUTION MARGIN ANALYSISSelect
a price for each service (grooming, day care,
boarding)Determine the variable cost from the Variable_Fixed
tab for each serviceCalculate the contribution margin for each
service based on your sales price and the variable cost for that
serviceBREAK-EVEN ANALYSISDetermine the fixed cost
from the Variable_Fixed tab for each serviceFixed & Variable

cost designation is providedCalculate the break-even units
(round up) for each serviceCalculate the break-even units
(round up) for suggested target profit levels for each service
Contribution Margin AnalysisDoggie DelightsMILESTONE 2 -
Contribution Margin per Unit & Contribution Margin
RatioINSTRUCTIONS: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 Care1. 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 Boarding1.
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 Groom1.
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 $35 per dog
per day, you can expect to have 3 dogs per day.DAY
CAREBOARDINGGROOMINGSales Price per Unit$ 18.00$
25.00$ 25.00Variable Cost per Unit4.657.359.97Contribution
Margin$ 13.35$ 17.65$ 15.03
Break-Even AnalysisDoggie DelightsMILESTONE 2 - Break-
Even AnalysisINSTRUCTIONS: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 MarginDAY

CAREBOARDINGGROOMINGSales Price$ 18.00$ 25.00$
25.00Fixed Costs$ 858$ 1,379$ 2,368Contribution Margin$
13.35$ 17.65$ 15.03Break-even Units (round
up)6579158Target Profit$ 417.00$ 583.00$ 1,000.00Break-
even Units (round up)96112225Target Profit$ 667.00$
909.00$ 1,500.00Break-even Units (round up)115130258
MILESTONE (Purple Tabs):GENERALUse data from Milestone
1 and Milestone 2 in your analysisRevenue data needed for the
Income Statement will be provided at the end of Module 4COST
OF SERVICES PROVIDED SCHEDULEUse the data at the top
of the schedule to complete the reportINCOME
STATEMENTUse the data at the top of the schedule to
complete the reportUse the data from your Cost of Services
Provided ScheduleVARIANCESUse the data at the top of the
schedule to calculate the following:VarianceFavorable /
Unfavorable
COS ScheduleDoggie DelightsMILESTONE 3 - Statement of
Cost of ServicesINSTRUCTIONS:The following are the actual
numbers for January:MaterialsPurchased $5,000 of
MaterialsConsumed 40% of those purchased materialsDirect
LaborDirect Labor was $6,240OverheadOverhead was
$2,800Doggie DelightsStatement of Cost of ServicesFor the
Month Ended January 31, xxxxBeginning Work in Process

Inventory0Direct Materials:Materials - Beginning0Add:
Purchases for month of January$ 5,000.00Materials Available
for Use5,000Deduct: Ending Materials3,000Materials Used $
2,000.00Direct Labor6,240Overhead2,800Total Service Costs$
11,040.00Deduct: Ending Work in Process Inventory0Cost of
Services$ 11,040* Cost of Goods Sold = Cost of Services
There is no finished goods inventory to maintain.
Income StatementDoggie DelightsMILESTONE 3 - Income
StatementINSTRUCTIONS:Complete the Statement in proper
formRevenue 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 =
$1,200Advertising = $100Cleaning Products =
$120Depreciation = $83Rent = $650Loan = $420Utilities &
Insurance = $600Doggie DelightsIncome StatementFor the
Month Ended January 31, xxxxRevenue:Grooming$ 3,000Day
Care11,880Boarding9,000Tota Revenue$ 23,880Cost of
Services *11,040Gross Profit$ 12,840Expenses:G&A Salaries$
1,200Advertising 100Cleaning
Products120Depreciation83Rent650Loan420Utilities and
Insurance600Total Expenses$ 3,173Net Income / Loss$
9,667* Cost of Goods Sold = Cost of Services There is no
finished goods inventory to maintain.
VariancesDoggie DelightsMILESTONE 3 - Variance
AnalysisINSTRUCTIONS: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.htmlDATA FOR VARIANCE

ANALYSIS:Standard
Hours / QtyStandard
RateActual
Hours / QtyActual
RateGrooming Labor150$ 12.00180$ 11.50Grooming
Materials1,000$ 2.001,200$ 3.00VarianceFavorable/
UnfavorableGroomer Direct Labor Time Variance(Actual Hours
- Standard Hours) x Standard Rate$
360.00UnfavorableGroomer Direct Labor Rate Variance(Actual
Rate - Standard Rate) x Actual Hours$ (90.00)FavorableDirect
Materials Quantity/Efficiency Variance(Actual Quantity -
Standard Quantity) x Standard Price$
400.00UnfavorableDirect Materials Price Variance(Actual Price
- Standard Price) x Actual Quantity$ 1,200.00Unfavorable
HOME/xl/drawings/drawing12.xml#Homehttp://accounting-
simplified.com/management/variance-
analysis/material/price.html

ACC 202 Milestone Three Income Statement Revenue Information.docx

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