Heaven spent the month of December talking to various suppliers in order to determine her cost structure. She added cost data to the information in Table 1.

Heavenly Creations, Inc. opened for business on January 1, 201X as planned and Heaven placed an initial deposit of $10,000 of cash into the business. First, Heaven made a purchase to stock her inventory. Heaven purchased $2,279 of direct ingredients and $150 of indirect ingredients on account for the cakes. During the month of January, the business used 200 pounds of flour, 200 pounds of sugar, 67 dozen eggs and had 4 bad eggs to dispose of during the month. 20 baking soda boxes, 200 pounds of butter, 100 pounds of raisins, 50 bottles of rum, and the other ingredients (one box of each for a total of four).

Manufacturing overhead is applied to production at 4 dollars per cake. Heaven paid cash for the purchase of the oven and all the salaries. Her nieces worked 300 hours in total for the month. January was a very good month for the bakery since it baked 200 cakes and sold all for cash. The average selling price was $50 per cake. All manufacturing overhead is closed out at month-end. The supplier was paid in full at month-end. Heavens Raw Material physical periodic inventory count resulted in an Inventory level valued at zero at month-end.

Materials Quantity Materia Measure Unit CostTotal Cost Materials S&A Expenses tem Unit Cost MOH Item UnitCost Labor Person Hours e Total Cost Depreciation Purchase Costs Total Cost MOH Cakes MOH Rate Total Cost Revenue - Cake's Sold CakesSales Price Total Cost TABLE 1: COST INFORMATION ltem and Ingredients Conventional oven Cost $6,000 (depreciated over 5 n/a years on a Straight-Line basis No salvage value) Standard per Cake Refrigerator Baking pans, licenses Baking flour S0 (provided by the landlord $0 (paid for by dad) $24 per8p $2 per dozen $15 per 25 pounds b $6 per 14 $6.50 per 4 pounds $8 per 2 pounds n/a 1 pound ds ba Sugar Baking soda Butter Raisins 1 pound ds box 1 pound 2 pound Others (currants, diced date nutmeg, molasses Cash Register $30 for all 4 boxes per month $12 per month (rental for 2 ears $12 per bottle Rum (alcohol Utilities (includes gas, electric $50 per month and water Mobile phone (business) Salary- Heaven Salary nieces Salary-aunt Accountant Rent Estimated MOH quarter of bottle $50 per month $500 per month $8 per hour $100 per month $100 per month $600 per month $4.00 per cake 1 person 1.5 hours per cake Cake Materials Quantity Materia Measure Unit CostTotal Cost Materials S&A Expenses tem Unit Cost MOH Item UnitCost Labor Person Hours e Total Cost Depreciation Purchase Costs Total Cost MOH Cakes MOH Rate Total Cost Revenue - Cake's Sold CakesSales Price Total Cost TABLE 1: COST INFORMATION ltem and Ingredients Conventional oven Cost $6,000 (depreciated over 5 n/a years on a Straight-Line basis No salvage value) Standard per Cake Refrigerator Baking pans, licenses Baking flour S0 (provided by the landlord $0 (paid for by dad) $24 per8p $2 per dozen $15 per 25 pounds b $6 per 14 $6.50 per 4 pounds $8 per 2 pounds n/a 1 pound ds ba Sugar Baking soda Butter Raisins 1 pound ds box 1 pound 2 pound Others (currants, diced date nutmeg, molasses Cash Register $30 for all 4 boxes per month $12 per month (rental for 2 ears $12 per bottle Rum (alcohol Utilities (includes gas, electric $50 per month and water Mobile phone (business) Salary- Heaven Salary nieces Salary-aunt Accountant Rent Estimated MOH quarter of bottle $50 per month $500 per month $8 per hour $100 per month $100 per month $600 per month $4.00 per cake 1 person 1.5 hours per cake Cake