variable & fixed cost exercises
8:134 II'ISGEE} E learn.snhu.edu OPERATIONAL & COST INFORMATION: For simplicity, base all calculations using 30 days in each month OPERATIONAL DATA Grooming: e Groomer can groom 5 dogs a day, 5 days a week Each grooming takes 1.5 labor hours Day Care: e Day Care can house 10 large dogs and 12 small dogs daily. Day Care is offered 6 days a week Boarding: ere are 12 kennels (single dog only). Boarding (kennel services) is offered every day Facilities: e Grooming facility is 200 square feet e Boarding facility is 2,500 square feet e Day Care facility is 1,500 square feet General: Man for startup costs monthly payment of $420; in effect immediately: limited cash and loan funding used angel investors Modest monthly draw of $600 a month for rst year; should be divided evenly amoung the services (grooming. day care, boarding) SALARY 8: 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 Groon 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 my 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 - $3159 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 - $34199 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 1 Insurance $600 per month; Allocate based on square footage Cage Bank - $2,200 per set of 5 Dryer - $1,250 Cleaning Products Odoban - $1455 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 8:16 7 .1 5GE D AA learn.snhu.edu C Instructions Instructions - Milestone 1 Company Profile 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 Shampoo Groomer Clipper(s) 1.37 Rent 30.95 Bowls 0.72 Loan 20 Towels 5.83 Utilities and Insurance 28.57 Scissors 1.01 Depreciation on heating system 3.95 Cleaning Products: Odoban 2.08 Cleaning Products: Simple Green 2.36 Draw 200 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 atten DAY CARE Item Variable Costs Item Fixed Costs Day care attendant 2.88 Rent 232.14 Toys 0.27 Loan 150 Bowls 0.1 Utilities and Insurance Towels 1.4 Depreciation on heating system 29.64 Cleaning Products: Odoban 15.59 Cleaning Products: Simple Green 16.78 Draw 200 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 0 Depreciation on kennels 80 Bowls 0.86 Ren 386.9 Towels 0.87 Loan 250 Utilities and Insurance Depreciation on heating system 49.4 Cleaning Products: Odoban 25.98 Cleaning Products: Simple Green 29.55 Draw 200 Total Variable Costs 7.35 Total Fixed Costs 1,378.97Instructions Instructions - Milestone 1 Company Profile Cost Classifica XYZ Corporation MILESTONE 1 - Cost Classification Exercise INSTRUCTIONS: provided for you. 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 The fixed and variable cost classifications have been provided for you. For more information see Objective 1 in Chapter 5. Item/Cost Direct Direct Material Labor Overhead Period Costs Fixed Variable Groomer Day care attendant X Receptionist Kennel attendant x Food and water bowls X Depreciation on kennels Ren Utilties and insurance Grooming tub 48" X Depreciation on heating system Clippers x Shampoo (Crystal Clear: five-gallon pail) Towels Scissors (7-inch straight, ear & nose) * " Toys (used in day care only) Cleaning products (used throughout) Dryer >
