At the end of the first month of opening your business, you calculate the actual operating costs of the business and the income you earned. You also notice and document the difference in what you budgeted for certain materials and labor against the actual amounts you spent on the same. For your statement of cost of goods sold, use the following data regarding the actual costs incurred by the business over the past month: Materials purchased: $20,000 Consumed 80% of the purchased materials Direct labor: $8,493 Overhead costs: $3,765 Note: Assume that the beginning materials and ending work in process are zero for the month. Use the following revenue and cost information for the income statement. Note that the revenue you use will depend on the pricing level options you chose in Milestone Two. Also, assume that after accounting for weekends and other holidays, there were 20 business days in the first month of operation. For example, if you chose a sales price of $20 per collar, the actual number of collars sold in the month was 33 per day or 33 x 20 = 660 per month. Established Sales Number of Items Sold per Price Collars $20 33 $24 28 $28 23 Leashes $22 28 $26 23 $30 18 Harnesses $25 25 $30 22 20 Day $35 The other costs incurred by the business include: General and administrative salaries o Receptionist: $1,950 Office supplies: $200 Other business equipment: $150 Variance At the end of the month, you find that the labor and materials spent on manufacturing collars was different from what you estimated: The collar maker had to work nine hours a day instead of eight due to an increased demand for collars. Because of the increased demand, the hourly rate you paid your employee for making the collars increased to $16.50. An increase in the cost of raw material led the direct material cost per collar to increase to $10. However, you also made and sold 60 more collars than you expected to sell in the month. You now need to determine the variance in the materials and labor cost from what you estimated in Milestone Two based on the market research data. 1 5:48 LTE Scenario It has now been one month since you launched your business. You are meeting with a few investors soon to share your vision for the company and to ask for more funding. You will be sharing your company's financial health at this meeting. To do that, you need to determine and analyze your company's performance over the last month using the data provided. Specifically, you must address the following rubric criteria: Statement of Cost of Goods Sold: Prepare the statement of cost of goods sold in the "COGS" tab of the workbook. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table. Income Statement: Use the given revenue data to prepare the "Income Statement" tab table and calculate the net income. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table. Variance Analysis: Prepare the data in the "Variances" tab to determine whether the variances are favorable or unfavorable. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table. Complete the data table for the variances by entering the budgeted (standard) and actual labor and material values. Remember to use the estimates for expected sales from your Milestone Two accionment from your Milestone Two assignment. Determine the variances for direct labor and direct materials in the "Variances" tab. Evaluate the significance of the variances in the "Variances" tab, and mark them as favorable or unfavorable. Guidelines for Submission Submit the Project Workbook with all tabs completed. This file should be completed and submitted using Microsoft Excel. Milestone Three-Statement of Cost of Goods Sold Beginning Work in Process Inventory Direct Materials Materials: Beginning Add Purchases for month of January 20,00000 Materials available for use 20.000.00 Deduct Ending materials 4,000.00 Materials Used 16,000.00 Direct Labor 16 Overhead 18 Total Costs 19 20 Deduct: Ending Work in Process Inventory 21 22 Cost of Goods Sold Milestone Three-Income Statement 403.33 3765.00 282583 28.258.33 Revenue Collars Leashes Harnesses Total Revenue Cost of goods sold Gross profit Expenses 13,44000 10,800.00 14,000.00 38240.00 28.258.33 9.981.67 General and administrative salaries 1,950 00 Office supplies 20000 Other business equipment 15000 Total Expenses $ 2.300.00 Net income/Loss 71417 Milestone Three-Variance Analysis Data for Variance Analy Bulpted Mandan Budgeted Actu Actual Rate aber M Variances for Coll Direct Laber Time Variance (Actual Hours Standard Hours) Standard Re Direct Labor Rate Ve Actual Rate Standard Rates Actual mus Direct Material Guardy/my Actual Quantity Standard Quantity Standard Price Direct Materials Price Varie Actual Price Standard Price) Actual Ganty Milestone Two - Contribution Margin Analysis Sales Price per Unit Variable Cost per Unit Contribution Margin COLLARS LEASHES HARNESSES 20.00 22.00 $ 25.00 9.10 12.10 14.60 10.90 9.90 10.40 Milestone Two - Break-Even Analysis COLLARS LEASHES HARNESSES Sales Price $ 20.00 $ 22.00 $ 25.00 Fixed Costs 4,028 4,028 $ 4,201 Contribution Margin 10.90 $ 9.90 10.40 Break-Even Units (round up) 370 407 404 Target Profit 300.00 400.00 Break-Even Units (round up) 397 448 500.00 453 Target Profit 500.00 600.00 $ 650.00 Break-Even Units (round up) 415 468 467