I only need help with the variance part! My teacher gave me feedback and said I did not have to add 60 to the materials quantity but I am not sure what she means and where to deduct it. I also need to adjust the costs accordingly.

Scenario

It has now been one month since you launched your business. You are meeting with a few investors soon to share your vision for the company and to ask for more funding. You will be sharing your companys financial health at this meeting. To do that, you need to determine and analyze your companys performance over the last month using the data provided.

Prompt

Use the information in the Milestone Three Actual Costs and Revenue Data Appendix Word Document to evaluate your companys performance, and complete the remaining tabs in the Project Workbook Spreadsheet that you used for the Milestone One and Two assignments.

Specifically, you must address the following rubric criteria:

• Statement of Cost of Goods Sold: Prepare the statement of cost of goods sold in the COGS tab of the workbook. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table.
• Income Statement: Use the given revenue data to prepare the Income Statement tab table and calculate the net income. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table.
• Variance Analysis: Prepare the data in the Variances tab to determine whether the variances are favorable or unfavorable. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table.
  • Complete the data table for the variances by entering the budgeted (standard) and actual labor and material values. Remember to use the estimates for expected sales from your Milestone Two assignment.
  • Determine the variances for direct labor and direct materials in the Variances tab.
  • Evaluate the significance of the variances in the Variances tab, and mark them as favorable or unfavorable.
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Data for Variance Analysis: 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