2017 Actual Data

2017

Actual

Average animal fee 41.25

Annual unit sales 2,786

Variable cost per animal

Feed 3.41

Veterinary Fees 3.80

Labor 2.48

Supplies 1.31

Fixed Costs

Depreciation 350

Interest & Penalties 320

Insurance 5,750

Rent 6,750

Advertisement 7,300

Repairs & Maintenance4,635

Entertainment4,430

SG&A 1,975

Utilities 4,105

Taxes 9,025

Instructions:

1. Add a flexible budget using prior year actual accounting data.The only change is annual units sales = 3,500.Enter the information in the flexible budget tab, column F.

2a. Add a second flexible budget using estimated annual unit sales = "X".This is your choice.Enter your volume choice in the flexible budget tab, column H, row 4. Enter all other data and calculations in the appropriate cells (column H).

2b.Increase the variable cost per animal by 10%.This applies to all variable cost categories (excluding advertising).

2c.The company plans to relocate the business.This may reduce rent by 2,150.

2d.The company uses a dated advertising program including the yellow pages and bill board signs.The company plans to reduce costs and effectiveness by investing in an online campaign. The cost structure changes to a mixed cost and includes $1,000 fixed plus variable costs.The variable cost is equal to .025 per online view plus $7.00 for appointments scheduled online.The company expects 10,000 views and 300 scheduled appointments.

3.Use the skills you learned from the week five learning team project.Compute the break even point in units and dollars and margin of safety for both flexible budgets.Enter the information in the flexible budget tab, rows 38-44.

2018 Annual Flexible Budget

Sales Volume 3500 Enter sales volume for both budgets

Flexible Flexible

Budget Budget

Sales

Less:Variable Expenses

Feed

Veterinary Fees

Labor

Supplies

Advertisement

Total Variable Expenses

Contribution Margin

Less:Fixed Expense

Depreciation

Interest & Penalties

Insurance

Rent

Advertisement

Repairs & Maintenance

Entertainment

SG&A

Utilities

Taxes

Total Fixed Expense

Net Income (Loss)

Break Even (Units)

Break Even (Dollars)

Margin of Safety (Dollars)