ACC $202$ Milestone One: Operational Costs Data Appendix

You plan to open a small business for manufacturing 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$).$ 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\mathrm{.}00$ per hour and work $40$ hours per week

One leash maker, who will be paid $$16\mathrm{.}00$ per hour and work $40$ hours per week

One harness maker, who will be paid $$17\mathrm{.}00$ per hour and work $40$ hours per week

One receptionist, who will be paid $$15\mathrm{.}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

$3$ collars per yard of webbing

$2$ leashes per yard of webbing

$2$ harnesses per yard of webbing

Polyester$/$nylon ribbons$-$$$9$ per yard of ribbon

$3$ collars per yard of ribbon

$2$ leashes per yard of ribbon

$2$ harnesses per yard of ribbon

Buckles made of cast hardware$-$ $$0\mathrm{.}50$ per buckle

$4$ buckles used per collar

$3$ buckles used per leash

$8$ buckles used per harness

$3$ industrial 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: $$250$ for $2,500($ $$0\mathrm{.}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

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.

Milestone One $-$ Variable and Fixed Costs

Collars

Leashes

Item

Fixed Costs

Leash maker's salary $($monthly$)$

Depreciation on sewing machines

Rent

Utilities and insurance

Scissors, thread, and cording

Loan payment

Salary to self

Harnesses

Item

Fixed Costs

Harness maker's salary

Depreciation on sewing machines

Rent

Utilities and insurance

Scissors, thread, and cording

Loan

Salary to self