Case Study 5 Supporting Data REQUIRED: From David Green's perspective, develop an analysis which explains your performance for the year ended December 31, 2013. Number of customers Pet Groom and Clean: Store Number 88 Operating Statement Gross Sales Less Variable Expenses Year Ended December 31, 2013 % Tues, Wed, Thurs Actual Budget $ 277,200 $ 250,000 % Fri, Sat, Mon Actual Budget 10,500 10,000 30% 20% 70% 80% Food 23,100 20,000 Labor 91,125 90,000 Operating Expenses 19,425 15,000 Price: Total Variable Expenses 133,650 125,000 Net contribution $ 143,550 $ 125,000 Other Expenses Tues, Wed, Thurs 18 25 Training Expenses 2,750 4,500 Advertising Fri, Sat, Mon 30 25 3,200 2,000 Service Development 27,720 25,000 Taxes Management overhead Accounting and insurance Employee benefits Total Other Expenses Net Income 13,750 12,000 7,500 6,500 Materials Cost: 65,500 52,500 18,225 18,000 Tues, Wed, Thurs 138,645 120,500 $ 4,905 $ 4,500 Fri, Sat, Mon 2.2 2.2 22 Employee hours per year 2,250 2,500 Variable expenses per clean 1.85 1.5 Wage rate 13.5 12 Number of employees 3 3
Case Study 5 Supporting Data REQUIRED: From David Green's perspective, develop an analysis which explains your performance for the year ended December 31, 2013. Number of customers Pet Groom and Clean: Store Number 88 Operating Statement Gross Sales Less Variable Expenses Year Ended December 31, 2013 % Tues, Wed, Thurs Actual Budget $ 277,200 $ 250,000 % Fri, Sat, Mon Actual Budget 10,500 10,000 30% 20% 70% 80% Food 23,100 20,000 Labor 91,125 90,000 Operating Expenses 19,425 15,000 Price: Total Variable Expenses 133,650 125,000 Net contribution $ 143,550 $ 125,000 Other Expenses Tues, Wed, Thurs 18 25 Training Expenses 2,750 4,500 Advertising Fri, Sat, Mon 30 25 3,200 2,000 Service Development 27,720 25,000 Taxes Management overhead Accounting and insurance Employee benefits Total Other Expenses Net Income 13,750 12,000 7,500 6,500 Materials Cost: 65,500 52,500 18,225 18,000 Tues, Wed, Thurs 138,645 120,500 $ 4,905 $ 4,500 Fri, Sat, Mon 2.2 2.2 22 Employee hours per year 2,250 2,500 Variable expenses per clean 1.85 1.5 Wage rate 13.5 12 Number of employees 3 3
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 5CE: Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and...
Related questions
Question
100%
In order to determine whether or not David should receive a positive evaluation and a bonus for his performance, there are 2 areas that you should consider:
- First step: Prepare a flexible budget analysis looking at gross sales and variable costs that are controllable by David (just calculate down to Contribution Margin).
- Second Step: Look at all other expenses and compare actual to budgeted. Determine which costs are controllable and not controllable by David. Remember, some costs are merely allocated by corporate.
Based on your analysis above, should David receive a positive evaluation and bonus?
Transcribed Image Text:Case Study 5
Supporting Data
REQUIRED: From David Green's perspective,
develop an analysis which explains your
performance for the year ended December 31,
2013.
Number of customers
Pet Groom and Clean: Store Number 88
Operating Statement
Gross Sales
Less Variable Expenses
Year Ended December 31, 2013
% Tues, Wed, Thurs
Actual
Budget
$
277,200 $
250,000
% Fri, Sat, Mon
Actual
Budget
10,500
10,000
30%
20%
70%
80%
Food
23,100
20,000
Labor
91,125
90,000
Operating Expenses
19,425
15,000
Price:
Total Variable Expenses
133,650
125,000
Net contribution
$
143,550 $
125,000
Other Expenses
Tues, Wed, Thurs
18
25
Training Expenses
2,750
4,500
Advertising
Fri, Sat, Mon
30
25
3,200
2,000
Service Development
27,720
25,000
Taxes
Management overhead
Accounting and insurance
Employee benefits
Total Other Expenses
Net Income
13,750
12,000
7,500
6,500
Materials Cost:
65,500
52,500
18,225
18,000
Tues, Wed, Thurs
138,645
120,500
$
4,905 $
4,500
Fri, Sat, Mon
2.2
2.2
22
Employee hours per year
2,250
2,500
Variable expenses per clean
1.85
1.5
Wage rate
13.5
12
Number of employees
3
3
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