A B D E F G H 3 Milestone Two - Contribution Margin Analysis 5 COLLARS LEASHES HARNESSES B Sales Price per Unit 9 Variable Cost per Unit 11 Contribution Margin 12 14 15 16 17 18 19 20Milestone One - Cost Classification INSTRUCTIONS: Putting an X in the appropriate spot, classify the costs as: Direct Material, Direct Labor, Overhead, or Period Costs. The Fixed and Variable cost classifications have been provided for you. Direct Direct Item/Cost Material Labor Overhead Period Costs Fixed Variable Salary - Collar maker 16 40 X Salary - Leash maker 16 40 Salary - Harness maker 17 40 X - - - . . . . . Salary - Receptionist 30 High-tensile strength nylon webbing Polyesterylon ribbons 12 Buckles made of cast hardware 9 Depreciation on sewing machines 165 Rent 750 Utilities and insurance 600 - - . . . . . . . ... Scissors, thread, and cording 1200 Price tags 250 Office supplies 2400 Other business equipment 2000 Loan payment 550 - - - - - - Salary to self 500 - - - - - - - -2 Milestone One - Variable and Fixed Costs Collars Item ariable Cost/Item Item Fixed Costs High-tensile strength nylon webbir $ 4.00 Collar maker's salary (monthly) $ 2.773.33 10 Polyesternylon ribbons 0.50 Depreciation on sewing machines 165.00 Buckles made of cast hardware 0.50 Rent 250.00 12 Price tags 0.10 Utilities and insurance 200.00 13 Scissors, thread, and cording 1,200.00 14 Loan payment 183.33 Salary to sell 166.67 Total Variable Costs per C $ 5.10 Total Fixed Costs $ 4,938.33 20 22 Leashes Item ariable Cost/Item Item Fixed Costs High-tensile strength nylon webbir $ 5.00 Leash maker's salary (monthly) $ 2.560.00 28 Polyesterylon ribbons 4.50 Depreciation on sewing machines 165.00 Buckles made of cast hardware 1.50 Rent 250.00 Price tag: 0. 10 Utilities and insurance $ 200.00 Scissors, thread, and cording 1.200.00 Loan payment 183.33 Salary to self 166.67 Total Variable Costs per L $ 12. 10 Total Fixed Costs $ 4.725.00 ####### 39 Harnesses Item ariable Cost/Item Item Fixed Costs High-tensile strength nylon webbir $ 3.00 Harness maker's salary 2,720.00 Polyesterylon ribbons 4.50 Depreciation on sewing machines 165.00 48 Buckles made of cast hardware 4.00 Rent $ 250.00 Price tags 0.10 Utilities and insurance 200.00 Scissors, thread, and cording $ 1,200.00 Loan $ 183.33 Salary to sell 166.67 Total Variable Costs per H $ 14.60 Total Fixed Costs $ 4,885.00 Cost Classification Variable and Fixed Costs Contribution Margin AnalysisACC 202 Milestone Cine: 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 haye 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. 'r'ou will also collect a modest salary for the first year of $500 per month,' remember to diyide eyenly among the services. Salary and Hiring Data I One collar maker, who will be paid $16.00 per hour and work 40 hours per week I One leash maker, who will be paid $16.00 per hour and work 40 hours per week I One harness maker, who will be paid $1100 per hour and work 40 hours per week I One receptionist, who will be paid $15.00 per hour and work 30 hours per week Other Costs I Rent: $?50 per month; allocate based on square footage I High-tensile strength nylon webbing$12 peryard of webbing o 3 collars peryard of webbing o 2 leashes per yard of webbing o 2 harnesses per yard of webbing I Polyeste rf' nylon ribbons$9 per yard of ribbon o 3 collars peryard of ribbon o 2 leashes per yard of ribbon on 2 harnesses per yard of ribbon I Buckles made of cast hardware$0.50 per buckle o 4 buckles used per collar on 3 buckles used per leash o 8 buckles used per harness I 3 industrial sewing machines at $3,300 each for a total of $9,900; depreciation is $105 per month {5 year life, zero salvage value] I Utilities and insurance: $000 per month; allocate based on square footage I Scissors, thread, cording: $1,200 I Price tags: $250 for 2,500 {$0.10 each] I Office supplies: $2,400 or $200 per month I Other business equipment: $2,000 I Loan payment of $550 per month I Salary drawn of$500 per month