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 $16.00 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 work 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 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—$0.50 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 ($0.10 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 my answers where 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 $3.00 Depreciation on sewing machines $55.00 Buckles made of cast hardware $2.00 Rent $250.00 Price tags $0.10 Utilities and insurance $200.00 Scissors, thread, and cording $400.00 Loan payment $183.33 Salary to self $166.67 Total Variable Costs per Collar $9.10 Total Fixed Costs $4,028.33 Leashes Item Variable Cost/Item Item Fixed Costs High-tensile strength nylon webbing $6.00 Leash maker's salary (monthly) $2,773.30 Polyester/nylon ribbons $4.50 Depreciation on sewing machines $55.00 Buckles made of cast hardware $1.50 Rent $250.00 Price tags $0.10 Utilities and insurance $200.00 Scissors, thread, and cording $400.00 Loan payment $183.33 Salary to self $166.67 Total Variable Costs per Leash $12.10 Total Fixed Costs $4,028.30 $4,028.30 Harnesses Item Variable Cost/Item Item Fixed Costs High-tensile strength nylon webbing $6.00 Harness maker's salary $2,946.60 Polyester/nylon ribbons $4.50 Depreciation on sewing machines $55.00 Buckles made of cast hardware $4.00 Rent $250.00 Price tags $0.10 Utilities and insurance $200.00 Scissors, thread, and cording $400.00 Loan $183.33 Salary to self $166.67 Total Variable Costs per Harness $14.60 Total Fixed Costs $4,201.67

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 $16.00 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 work 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 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—$0.50 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 ($0.10 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 my answers where 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 $3.00 Depreciation on sewing machines $55.00 Buckles made of cast hardware $2.00 Rent $250.00 Price tags $0.10 Utilities and insurance $200.00 Scissors, thread, and cording $400.00 Loan payment $183.33 Salary to self $166.67 Total Variable Costs per Collar $9.10 Total Fixed Costs $4,028.33 Leashes Item Variable Cost/Item Item Fixed Costs High-tensile strength nylon webbing $6.00 Leash maker's salary (monthly) $2,773.30 Polyester/nylon ribbons $4.50 Depreciation on sewing machines $55.00 Buckles made of cast hardware $1.50 Rent $250.00 Price tags $0.10 Utilities and insurance $200.00 Scissors, thread, and cording $400.00 Loan payment $183.33 Salary to self $166.67 Total Variable Costs per Leash $12.10 Total Fixed Costs $4,028.30 $4,028.30 Harnesses Item Variable Cost/Item Item Fixed Costs High-tensile strength nylon webbing $6.00 Harness maker's salary $2,946.60 Polyester/nylon ribbons $4.50 Depreciation on sewing machines $55.00 Buckles made of cast hardware $4.00 Rent $250.00 Price tags $0.10 Utilities and insurance $200.00 Scissors, thread, and cording $400.00 Loan $183.33 Salary to self $166.67 Total Variable Costs per Harness $14.60 Total Fixed Costs $4,201.67

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 $16.00 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 work 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
- 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—$0.50 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 ($0.10 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

my answers where


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	$3.00	Depreciation on sewing machines	$55.00
Buckles made of cast hardware	$2.00	Rent	$250.00
Price tags	$0.10	Utilities and insurance	$200.00
		Scissors, thread, and cording	$400.00
		Loan payment	$183.33
		Salary to self	$166.67



Total Variable Costs per Collar	$9.10	Total Fixed Costs	$4,028.33



Leashes

Item	Variable Cost/Item	Item	Fixed Costs

High-tensile strength nylon webbing	$6.00	Leash maker's salary (monthly)	$2,773.30
Polyester/nylon ribbons	$4.50	Depreciation on sewing machines	$55.00
Buckles made of cast hardware	$1.50	Rent	$250.00
Price tags	$0.10	Utilities and insurance	$200.00
		Scissors, thread, and cording	$400.00
		Loan payment	$183.33
		Salary to self	$166.67




Total Variable Costs per Leash	$12.10	Total Fixed Costs	$4,028.30	$4,028.30



Harnesses

Item	Variable Cost/Item	Item	Fixed Costs

High-tensile strength nylon webbing	$6.00	Harness maker's salary	$2,946.60
Polyester/nylon ribbons	$4.50	Depreciation on sewing machines	$55.00
Buckles made of cast hardware	$4.00	Rent	$250.00
Price tags	$0.10	Utilities and insurance	$200.00
		Scissors, thread, and cording	$400.00
		Loan	$183.33
		Salary to self	$166.67




Total Variable Costs per Harness	$14.60	Total Fixed Costs	$4,201.67

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