EXHIBIT 1

Sales Price, Production Costs, and Operating Expenses

Sales Price

A dozen cookies sell for $12.05.

Direct Materials Costs

Material	Per Unit Cost
Flour	$ .15
Sugar	$ .15
Eggs	$ .10
Shortening	$ .50
Chocolate Chips	$ 1.25

Any other ingredients are indirect materials and are considered part of manufacturing overhead

Direct Labor Costs

Information regarding direct labor costs is not maintained because you are your only employee. In this case, labor costs are considered part of manufacturing overhead.

Manufacturing Overhead Costs

	Variable costs per dozen	Fixed costs per month
Utilities	$ .50	N/a
Other indirect materials and labor	$ .75	N/a
Maintenance	N/a	$ 250
Depreciation	N/a	$ 500
Totals	$ 1.25	$ 750

Operating Expenses

	Variable costs per dozen	Fixed costs per month
Shipping Costs	$ 1.50	N/a
Salaries	N/a	$ 2,000
Depreciation	N/a	$ 200
Other	N/a	$ 1,450
Totals	$ 1.50	$ 3,650

Use the information provided in the Master Budget assignment prompt to prepare the sales budget for the first quarter.

	January	February	March	Quarter
Budgeted sales (in dozens)
Sales price per dozen
Total sales