Cost of manufacturing each small milk shake = $2.18

PROJECTED INCOME STATEMENT - MONTH OF JANAURY

	Large (60%)	Small (40%)	Total
Number of milk shakes expected to be sold	75,000	50,000	125,000
Sales price per milk shake (less resort fee)	$9.00	$6.30
Cost of goods sold per milk shake	$2.81	$2.18
Sales
Less: cost of goods sold
Gross Profit
Less: Operating expenses
Operating Income
Income tax expense (income tax rate = 35%)
Net Income

So what is the BUDGETED MANUFACTURING COST FOR ONE UNIT: Direct Materials Variable Costs per unit: Ingredient Cost Small Large Whole milk $15 for 640 oz. 0.02344 per oz. 0.05 0.07 Cream $20 for 128 oz. 0.15625 per oz. 0.31 0.47 Sugar $10 for 30 cups 0.33333 per cup 0.17 0.25 Premium Vanilla Ice Cream $24 for 600 oz. 0.04000 per oz. 0.24 0.36 Flavorings 0.25 0.40 Flavored Specialty Straws 0.75 0.75 Cups-8 ounces $200 for 500 cups 0.40000 per cup 0.40 Cups-12 ounces $250 for 500 cups 0.50000 per cup 0.50 TOTAL DIRECT MATERIAL COST PER UNIT $2.17 $2.80 LARGE MILK SHAKES per the PRODUCTION budget we expect to produce 1,580,000 in the first Year: (125,000+125,000+150,000+125,000+125,000+150,000+160,000+150,000+110,000+110,000 +110,000+140,000). (1) Direct materials cost per milk shake: 2.80 (2) Manufacturing overhead: Fixed ($2,234.00 *12months * 60% per quarter)/1,580,000 = milk shakes 001. Cost of manufacturing each large milk shake $2.81 SMALL MILK SHAKES - per the PRODUCTION budget we expect to produce 165,000 in the first quarter. (1) Direct materials cost per milk shake: 2.17 (2) Manufacturing overhead: Fixed ($2,234.00 * 12 months * 40% per quarter)/ 1,580,000 = milk shakes Cost of manufacturing each small milk shake 001 II $2.18