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

Dogz R Us 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. Direct Material Direct Labor Item/Cost Overhead Period Costs Fixed Variable Groomer Day care attendant Receptionist Kennel attendant Food and water bowls Depreciation on kennels X Rent Utilties and insurance Grooming tub 48" x Depreciation on heating system Clippers Shampoo (Crystal Clear: five-gallon pail) Towels X --------------- x X Scissors (7-inch straight, ear & nose) Toys (used in day care only) Cleaning products (used throughout) X Dryer Dogz R Us 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 Variable Costs Item Fixed Costs $ $ 1.37 Shampoo Clipper(s) Bowls Towels Scissors 0.72 5.83 1.01 Groomer Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw 30.95 20.00 28.57 3.95 2.08 2.36 200.00 Total Variable Costs $ 9.97 Total Fixed Costs $ 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 Variable Costs Item Fixed Costs Day care attendant $ 2.88 Rent $ 232.14 Toys 0.27 Loan 150.00 Bowls 0.10 Utilities and Insurance Towels 1.40 Depreciation on heating system 29.64 Cleaning Products: Odoban 15.59 Cleaning Products: Simple Green 16.78 Draw 200.00 118 Draw 200.00 Total Variable Costs $ 9.97 Total Fixed Costs $ 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 Variable Costs Item Fixed Costs $ 232.14 150.00 Day care attendant Toys Bowls Towels 2.88 0.27 0.10 1.40 Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green Draw 29.64 15.59 16.78 200.00 Total Variable Costs Total Fixed Costs $ 858.44 Based on 12 dogs per day. Assume 22 eight-hour work days for kennel attendant. BOARDING Item Variable Costs Item Fixed Costs $ $ Kennel attendant Bowls Towels 0.86 0.87 80.00 386.90 250.00 Depreciation on kennels Rent Loan Utilities and Insurance Depreciation on heating system Cleaning Products: Odoban Cleaning Products: Simple Green 49.40 25.98 29.55 200.00 Draw Total Variable Costs $ 7.35 Total Fixed Costs $ 1,378.97