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ACC 2-2 Milestone One: Cost Classification Assignment essay paper

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ACC 2-2 Milestone One: Cost Classification Assignment

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Instructions

Southern New Hampshire University
College of Continuing Education (COCE)ACC 2-2 Milestone One: Cost Classification Assignment
ACC202 – Managerial Accounting
MILESTONE 1 (Due in Module 2) MILESTONE 2 (Due in Module 4) MILESTONE 3 (Due in Module 5)
1. 1. 1.
Name Choose a price range and calculate: Create a Cost of Goods Manufactured Schedule
LocationACC 2-2 Milestone One: Cost Classification Assignment  Grooming
Vision Day Care
Mission Boarding
2. 2. 2.
Identify the following: Calculate the break-even units Create an Income Statement
Direct Materials Grooming Revenue will be provided end of week 4
Diret Labor Day Care
Manufacturing OverheadACC 2-2 Milestone One: Cost Classification Assignment  Boarding
Period Costs Calculate the break-even for target profits
3. Grooming 3.
Day Care
Calculate the Variable & Fixed Costs for: Boarding Calculate for the Grooming line:
Grooming Direct Labor Time Variance
Day Care Direct Labor Rate Variance
Boarding Direct Materials Efficiency Variance
Direct Materials Price Variance

ACC202 – MANAGERIAL ACCOUNTING

Company ProfileACC 2-2 Milestone One: Cost Classification Assignment 

/xl/drawings/drawing1.xml#CompanyProfileVariable & Fixed Costs

/xl/drawings/drawing1.xml#VariableFixedCostsCost Classification

/xl/drawings/drawing1.xml#CostClassificationContribution Margin

/xl/drawings/drawing1.xml#ContributionMarginBreak-Even Analysis

/xl/drawings/drawing1.xml#BreakevenAnalysisCOGM Schedule

/xl/drawings/drawing1.xml#COGMScheduleIncome Statement

/xl/drawings/drawing1.xml#COGMScheduleVariances

/xl/drawings/drawing1.xml#VariancesInstructions Milestone 1ACC 2-2 Milestone One: Cost Classification Assignment

/xl/drawings/drawing1.xml#InstructionsMilestone1Instructions Milestone 2

/xl/drawings/drawing1.xml#’Instructions%20-%20Milestone%202′!InstructionsMilestone2Instructions Milestone 3

/xl/drawings/drawing1.xml#’Instructions%20-%20Milestone%203′!InstructionsMilestone3

Instructions – Milestone 1

Southern New Hampshire University
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)ACC 2-2 Milestone One: Cost Classification Assignment 
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
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)
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

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/xl/drawings/drawing2.xml#Home

Cost Classification

Milestone One – Cost Classification
INSTRUCTIONS:
Putting an X in the appropriate spot, classify the costs as: Direct Material, Direct Labor, Overhead, or Period Costs.
The Fixed and Variable cost classifications have been provided for you.
Item/Cost Direct Material Direct Labor Overhead Period Costs Fixed Variable
Salary – Collar maker x
Salary – Leash maker x
Salary – Harness maker x
Salary – Receptionist
High-tensile strength nylon webbing x
Polyester/nylon ribbons x
Buckles made of cast hardware x
Depreciation on sewing machines x
Rent x
Utilities and insurance x
Scissors, thread, and cording x
Price tags x
Office supplies
Other business equipment
Loan payment x
Salary to self x

&8ACC202 – MANAGERIAL ACCOUNTING

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/xl/drawings/drawing3.xml#Home

Variable and Fixed Costs

Milestone One – Variable and Fixed Costs
Collars
Item Variable Cost/Item Item Fixed Costs
High-tensile strength nylon webbing $ 4.00 Collar maker’s salary (monthly) $ 2,773.33
Polyester/nylon ribbons Depreciation on sewing machines
Buckles made of cast hardware Rent
Price tags Utilities and insurance
Scissors, thread, and cording
Loan payment $ 183.33
Salary to self $ 166.67
Total Variable Costs per Collar Total Fixed Costs
Leashes
Item Variable Cost/Item Item Fixed Costs
High-tensile strength nylon webbing Leash maker’s salary (monthly)
Polyester/nylon ribbons Depreciation on sewing machines
Buckles made of cast hardware Rent
Price tags Utilities and insurance
Scissors, thread, and cording
Loan payment
Salary to self
Total Variable Costs per Leash Total Fixed Costs $ – 0
Harnesses
Item Variable Cost/Item Item Fixed Costs
High-tensile strength nylon webbing Harness maker’s salary
Polyester/nylon ribbons Depreciation on sewing machines
Buckles made of cast hardware Rent
Price tags Utilities and insurance
Scissors, thread, and cording
Loan
Salary to self
Total Variable Costs per Harness Total Fixed Costs

&8ACC202 – MANAGERIAL ACCOUNTING

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/xl/drawings/drawing4.xml#Home

Instructions – Milestone 2

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

ACC202 – MANAGERIAL ACCOUNTING

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/xl/drawings/drawing5.xml#Home

Contribution Margin Analysis

Milestone Two – Contribution Margin Analysis
COLLARS LEASHES HARNESSES
Sales Price per Unit
Variable Cost per Unit
Contribution Margin

&8ACC202 – MANAGERIAL ACCOUNTING

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/xl/drawings/drawing6.xml#Home

Break-Even Analysis

Milestone Two – Break-Even Analysis
COLLARS LEASHES HARNESSES
Sales Price $ – 0 $ – 0 $ – 0
Fixed Costs $ – 0 $ – 0 $ – 0
Contribution Margin $ – 0 $ – 0 $ – 0
Break-Even Units (round up) – 0 – 0 – 0
Target Profit $ 300.00 $ 400.00 $ 500.00
Break-Even Units (round up) – 0 – 0 – 0
Target Profit $ 500.00 $ 600.00 $ 650.00
Break-Even Units (round up) – 0 – 0 – 0

&8ACC202 – MANAGERIAL ACCOUNTING

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/xl/drawings/drawing7.xml#Home

Instructions – Milestone 3

Southern New Hampshire University
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

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COGS

Milestone Three – Statement of Cost of Goods Sold
Beginning Work in Process Inventory $ – 0
Direct Materials:
Materials: Beginning 0
Add: Purchases for month of January
Materials available for use
Deduct: Ending materials
Materials Used
Direct Labor
Overhead
Total Costs
Deduct: Ending Work in Process Inventory 0
Cost of Goods Sold

&8ACC202 – MANAGERIAL ACCOUNTING

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/xl/drawings/drawing9.xml#Home

Income Statement

Milestone Three – Income Statement
Revenue:
Collars $ – 0
Leashes – 0
Harnesses – 0
Total Revenue: $ – 0
Cost of goods sold – 0
Gross profit $ – 0
Expenses:
General and administrative salaries $ – 0
Office supplies – 0
Other business equipment – 0
Total Expenses $ – 0
Net Income/Loss $ – 0

&8ACC202 – MANAGERIAL ACCOUNTING

Variances

Milestone Three – Variance Analysis
Data for Variance Analysis:
Budgeted (Standard) Hours/Qty Budgeted (Standard) Rate Actual Hours/Qty Actual Rate
Labor
Materials
Variances for Collar Sales
Variance Favorable/ Unfavorable
Direct Labor Time Variance
(Actual Hours – Standard Hours) x Standard Rate $ – 0
Direct Labor Rate Variance
(Actual Rate – Standard Rate) x Actual Hours $ – 0
Direct Materials Quantity/Efficiency Variance
(Actual Quantity – Standard Quantity) x Standard Price $ – 0
Direct Materials Price Variance
(Actual Price – Standard Price) x Actual Quantity $ – 0

&8ACC202 – MANAGERIAL ACCOUNTING

ACC 2-2 Milestone One: Cost Classification Assignment essay paper

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ACC 2-2 Milestone One: Cost Classification Assignment

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Overview

Successful entrepreneurs understand all aspects of business,ACC 2-2 Milestone One: Cost Classification Assignment  especially costs and costing systems. In the course project, you will assume the role of the owner of a small business and apply managerial accounting principles to evaluate and manage costs related to your services within a costing system. In the first milestone of the project, you will determine and classify the costs necessary for opening your business.ACC 2-2 Milestone One: Cost Classification Assignment

Scenario

You plan to open a business manufacturing collars, leashes, and harnesses for pets. To begin, you will manufacture these in a standard style and size with plans to expand your range over the year. In a few weeks, you will present your company’s financial strategy to some key investors. To begin creating your strategy, you need to consider and record all the costs associated with ACC 2-2 Milestone One: Cost Classification Assignment operating your business. You have decided to use the job order costing system.

Prompt

Use the given operational costs in the Milestone One Operational Costs Data Appendix Word Document  to complete the first two tabs, “Cost Classification” and “Variable and Fixed Costs,” in the Project Workbook Spreadsheet.

Specifically, you must address the following rubric criteria:

  • Cost Classification. Accurately classify all your costs in the “Cost Classification” tab of your workbook.
    • Identify direct material, direct labor, overhead, ACC 2-2 Milestone One: Cost Classification Assignment and period costs. (Note: Fixed and variable costs have been classified for you.)
  • Variable and Fixed Costs. Complete the “Variable and Fixed Costs” tab of your workbook. (Note: Some costs are provided for you. Fill in only the missing costs.)
    • Determine your total variable cost per unit and the total fixed costs for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.ACC 2-2 Milestone One: Cost Classification Assignment 

Guidelines for Submission

Submit the Project Workbook with the “Cost Classification” and “Fixed and Variable Costs” tabs completed. This file should be completed and submitted ACC 2-2 Milestone One: Cost Classification Assignment using Microsoft Excel.

Milestone One Rubric

Criteria Exemplary (100%) Proficient (85%) Needs Improvement (55%) Not Evident (0%) Value
Costs Classification Classifies all costs, including direct material, direct labor, overhead, and period costs, with no errors Classifies all costs, including direct material, direct labor, overhead, and period costs, with minimal errors Classifies all costs, including direct material, direct labor, overhead, and period costs, with significant errors Does not attempt criterion 25
Variable and Fixed Costs: Collars Determines the per unit cost and the fixed costs for collars, with no errors; shows work through calculations or formulas Determines the per unit cost and the fixed costs for collars, with minimal errors Determines the per unit cost and the fixed costs for collars, with significant errors Does not attempt criterion 25
Variable and Fixed Costs: Leashes Determines the per unit cost and the fixed costs for leashes, with no errors; shows work through calculations or formulas Determines the per unit cost and the fixed costs for leashes, with minimal errors Determines the per unit cost and the fixed costs for leashes, with significant errors Does not attempt criterion 25
Variable and Fixed Costs: Harnesses Determines the per unit cost and the fixed costs for harnesses, with no errors; shows work through calculations or formulas Determines the per unit cost and the fixed costs for harnesses, with minimal errors Determines the per unit cost and the fixed costs for harnesses, with significant errors Does not attempt criterion 25
Total: 100%

ACC 2-2 Milestone One: Cost Classification Assignment essay paper

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ACC 2-2 Milestone One: Cost Classification Assignment

You plan to open a small business for manufacturingACC 2-2 Milestone One: Cost Classification Assignment  pet collars, leashes, and harnesses. You have found a workshop space you can use for sewing your products. After some research and planning, you have estimates for the various operating costs for your business.
The total square footage for the sewing rooms is 1,500 square feet broken into three areas (500 square feet each)ACC 2-2 Milestone One: Cost Classification Assignment . You have taken out a loan for start-up costs, and the monthly payment is $550; it goes into effect immediately and should be accounted for in your costs. You will also collect a modest salary for the first year of $500 per month; remember to divide evenly among the services.
Salary and Hiring Data
• One collar maker, who will be paid $16.00 per hour and work 40 hours per week
• One leash maker, who will be paid $16.00 per hour and work 40 hours per week
• One harness maker, who will be paid $17.00 per hour and workACC 2-2 Milestone One: Cost Classification Assignment  40 hours per week
• One receptionist, who will be paid $15.00 per hour and work 30 hours per week
Other Costs
• Rent: $750 per month; allocate based on square footage
• High-tensile strength nylon webbing—$12 per yard of webbing
o 3collarsperyardofwebbing
o 2leashesperyardofwebbing
o 2harnessesperyardofwebbing
• Polyester/nylon ribbons—$9 per yard of ribbon o 3collarsperyardofribbon
o 2leashesperyardofribbon
o 2harnessesperyardofribbon
• Buckles made of cast hardware—$0.50 per buckle
o 4bucklesusedpercollar
o 3bucklesusedperleash
o 8bucklesusedperharness
• 3 industrialACC 2-2 Milestone One: Cost Classification Assignment  sewing machines at $3,300 each for a total of $9,900; depreciation is $165 per month (5- year life, zero salvage value)
• Utilities and insurance: $600 per month; allocate based on square footage
• Scissors, thread, cording: $1,200
• Price tags: ACC 2-2 Milestone One: Cost Classification Assignment $250 for 2,500 ($0.10 each)
• Office supplies: $2,400 or $200 per month
• Other business equipment: $2,000
• Loan payment of $550 per month
• Salary drawn of $500 per month
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