ACC $202$ Milestone Two Guidelines and Rubric Milestone Two $-$ Contribution Margin Analysis Milestone Three $-$ Statement of Cost of Goods Sold

Beginning Work in Process Inventory

Direct Materials:

Materials: Beginning

Add: Purchases for month of January

Materials available for use

Deduct: Ending materials

Materials Used

Direct Labor

Overhead

Total Costs

$0$

longrightarrow

Deduct: Ending Work in Process Inventory

Cost of Goods Sold Milestone Three $-$ Income Statement

Revenue:

Collars

Leashes

Harnesses

Total Revenue:

Cost of goods sold

Gross profit

Expenses:

$\backslash$table$[[$General and administrative salaries$],[$Office supplies$],[$Other business equipment$]]$

Total Expenses

Net Income$/$LossMilestone One $-$ Variable and Fixed Costs

Milestone Three $-$ Statement of Cost of Goods Sold

Overview

The next step in planning for your new business is to analyze the cost behaviors and systems of your industry and conduct the relevant financial calculations to determine appropriate costing solutions. In this milestone assignment, you will conduct a break$-$even analysis to determine your target profits and the selling price you plan to use to achieve these profits for each product.

Prompt

Use information from Milestone One and the provided Milestone Two Market Research Data Appendix Word Document to conduct a cost$-$volume profit analysis. Complete the $$Contribution Margin Analysis$$ and $$Break$-$Even Analysis$$ tabs in the Project Workbook Spreadsheet that you used for completing the Milestone One assignment.

Specifically, you must address the following rubric criteria:

Contribution Margin. Determine your contribution margin per unit in the $$Contribution Margin Analysis$$ tab.

Choose a sales price for each product.

Calculate the contribution margin for each product based on your sales price and the variable cost for that product. Show your work using calculations to the side of the table or using appropriate formulas in the table.

Break$-$Even Analysis. Use cost$-$volume$-$profit $($CVP$)$ analysis to determine your break$-$even points for achieving your target profits in the $$Break$-$Even Analysis$$ tab.

Determine the break$-$even points for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.

Determine break$-$even units for the suggested target profits for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.You have conducted some market research for style and size of products you want to use to launch your business. The market research has indicated the following sales price ranges will be optimal for your area depending on style of products you choose to sell:

$$ Collars

o With pricing at $$20$ per collar, you can expect to sell $30$ collars per day.

o With pricing at $$24$ per collar, you can expect to sell $25$ collars per day.

o With pricing at $$28$ per collar, you can expect to sell $20$ collars per day

$$ Leashes

o With pricing at $$22$ per leash, you can expect to sell $28$ leashes per day.

o With pricing at $$26$ per leash, you can expect to sell $23$ leashes per day.

o With pricing at $$30$ per leash, you can expect to sell $18$ leashes per day.

$$ Harnesses

o With pricing at $$25$ per harness, you can expect to sell $25$ harnesses per day.

o With pricing at $$30$ per harness, you can expect to sell $22$ harnesses per day.

o With pricing at $$35$ per harness, you can expect to sell $20$ harnesses per day.

Additionally, you will need to compare your break$-$even points for the following target profits for each area of your business to determine your prices:

$$ Collars

o Break$-$even

o $$300$ target profit each month

o $$500$ target profit each month

$$ Leashes

o Break$-$even

o $$400$ target profit each month

o $$600$ target profit each month

$$ Harnesses

o Break$-$even

o $$500$ target profit each month

o $$650$ target profit each monthMilestone One $-$ Variable and Fixed Costs

Milestone Three $-$ Statement of Cost of Goods Sold