For your statement of cost of goods sold, use the following dataregarding the actual costs incurred by the business over the past month:

Materials purchased: $20,000

o Consumed 80% of the purchased materials

Direct labor: $8,493.33

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 Price	Number of Items Sold per Day
Collars
$20	33
$24	28
$28	23
Leashes
$22	28
$26	23
$30	18
Harnesses
$25	25
$30	22
$35	20

The other costs incurred by the business include:

General and administrative salaries

o Receptionist: $1,950

o Owner salary: $500

Depreciation: $165

Rent: $750

Utilities and insurance: $600

Scissors, thread, and cording: $1,200

Loan repayment: $550

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.

COLLARS LEASHES HARNESSES Sales Price per Unit Variable Cost per Unit 15 9.1 18 12.1 20 14.6 Contribution Margin 5.9 5.9 5.4 COLLARS LEASHES HARNESSES Sales Price 15 18 20 Fixed Costs 4,028.333 4.028.333 4,201.66 Contribution Margin 5.9 5.9 5.4 Break-Even Units (round up) 682.768 682.768 778.085 Target Profit 300 400 500 Break-Even Units (round up) 733.559 750.565 870.678 Target Profit 500 600 650 Break-Even Units (round up) 767.514 784.463 898.456 0 Revenue: Collars Leashes Harnesses 0 0 Total Revenue: Cost of goods sold Gross profit 0 0 0 0 Expenses: General and administrative salaries Depreciation Rent Utilities and insurance Scissors, thread, and cording Loan 0 0 0 0 Total Expenses 0 Net Income/Loss 0 Data for Variance Analysis: Budgeted (Standard) Hours/Qty Budgeted (Standard) Rate Actual Hours/Qty Actual Rate Labor Materials Variances for Collar Sales Variance Favorable/ Unfavorable Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) x Standard Price 0 Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity 0