Collect a modest salary for the first year of $500 per month; divide evenly among the services.

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

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   Depreciation on sewing machines
Buckles made of cast hardware   Rent
Price tags   Utilities and insurance
Scissors, thread, and cording
Loan payment $ 183.33
Salary to self $ 166.67

Total Variable Costs per Collar   Total Fixed Costs

Leashes
Item Variable Cost/Item Item Fixed Costs
High-tensile strength nylon webbing   Leash maker’s salary (monthly)
Polyester/nylon ribbons   Depreciation on sewing machines
Buckles made of cast hardware   Rent
Price tags   Utilities and insurance
Scissors, thread, and cording
Loan payment
Salary to self

Total Variable Costs per Leash   Total Fixed Costs

Harnesses
Item Variable Cost/Item   Item Fixed Costs
High-tensile strength nylon webbing     Harness maker’s salary
Polyester/nylon ribbons     Depreciation on sewing machines
Buckles made of cast hardware     Rent
Price tags     Utilities and insurance
Scissors, thread, and cording
Loan
Salary to self

Total Variable Costs per Harness     Total Fixed Costs

Collect a modest salary for the first year of $500 per month; divide evenly among the services.
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