Imagine, you are planning to start a new small, home-based business. You are going to make and sell a single food item. What is the food item that your business will sell?

Assumptions:

• You are starting your business next month, so currently you have no beginning inventory of finished goods or raw materials. Also, there is no beginning balance for accounts payable or accounts receivable.
• Since the business is very small and home-based, there is no direct labor cost for your business. Labor wage (if any) is assumed to be fixed and part of MOH.
• All the manufacturing costs you incur for your business falls under any one of the two categories: direct material (DM) or MOH. (Remember indirect material part of MOH)
• To calculate the DM cost for your product, find out a simple recipe for the product you are planning to sell. You MUST NOT visit any physical store to collect any data. All information must be collected from the internet. If you cant find any information you need on the internet, make reasonable guesses.
• For each of your direct material fill out the following table. Make more copies of the table if necessary. You need to have a separate table for each direct material.

Direct Material 1:

• Direct material item name
  Quantity required for each unit of product
  Desired ending inventory as a percentage of following months production requirement
  Price per unit of direct material

  Direct Material 2:

  Direct Material Name
  Quantity Required for Each Unit of Product
  Desired Ending Inventory as a Percentage of Following Months Production Requirement
  Price Per Unit of Direct Material

  Direct Material 3:

  Direct Material Name
  Quantity Required for Each Unit of Product
  Desired Ending Inventory as a Percentage of Following Months Production Requirement
  Price Per Unit of Direct Material