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 The other costs incurred by the business include General and administrative salaries 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 Milestone Three Statement of Cost of Goods Sold Beginning Work in Process Inventory Direct Materials Materials Beginning Add Purchases for month ofJanuanr Materials a1 rai lala lefor use Deduct Ending materials Materials Used Direct Labor Duerl'lead Total Costs Deduct Ending Work in Process Inventory Cost of Goods Sold fMilestone Three Statement of Cost of Goods Sold Beginning Work in Process Inventory Direct Materials Materials Beginning Add Purchases for month ErfJar'IUEW 5 Materials available for use Deduct Ending materials Materials U seal Direct Labor Overhead Total Costs Deduct Ending Work in Process Inventory 1 Cost of Goods Sold '35 zooooo zoqooo 4oooo lQDDU a493 1 55 1 253 ID 1 2,253

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 24, 2024

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

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.

The other costs incurred by the business include:

General and administrative salaries
- 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.

Milestone Three - Statement of Cost of Goods Sold Beginning Work in Process Inventory Direct Materials: Materials: Beginning Add: Purchases for month ofJanuanr Materials a1.rai lala lefor use Deduct; Ending materials Materials Used Direct Labor Duerl'lead Total Costs Deduct: Ending Work in Process Inventory Cost of Goods Sold \fMilestone Three - Statement of Cost of Goods Sold Beginning Work in Process Inventory Direct Materials: Materials: Beginning Add: Purchases for month ErfJar'IUEW 5 Materials available for use Deduct: Ending materials Materials U seal Direct Labor Overhead Total Costs Deduct: Ending Work in Process Inventory 1 Cost of Goods Sold '35 zooooo zoqooo 4oooo lQDDU a493 1:55 1?;253 ID 1?2,253