In this project, you will demonstrate your mastery of the following competencies:

• Describe how managerial accounting supports management information systems
• Utilize managerial accounting techniques and models to support an organizations strategic plan
• Explain how managerial accounting is used to make decisions about short-term business opportunities, capital investments, and evaluating operational performance

Scenario

Your business has been open for a month, and you have prepared an income statement and completed a variance analysis on the data. Now you will meet with investors and a few other internal stakeholders to share your companys progress over the past month and how it has performed with respect to your cost and budget projections. The investors would like to see the thought process behind your financial strategy and how your company has performed in its first month. They have therefore asked you to present a report that includes the costing and income data from your Project Workbook.

Directions

Submit a detailed report to your potential investors and other stakeholders to explain and defend your costing strategies and to share your businesss performance to date. Your report can be in the form of a Word document. Be sure to effectively communicate with your stakeholders by breaking down concepts and using investor-friendly language to build their trust and confidence.

1. Financial Statements: Using the information in the Milestone Two Market Research Data Appendix, assess your financial performance to date.
   1. Statement of Cost of Goods Sold: Share the statement of cost of goods sold and logically interpret the businesss performance against the provided benchmarks.
   2. Income Statement: Share the income statement and logically interpret the businesss performance against the provided benchmarks.
   3. Variances: Illustrate all variances for the direct labor time and the materials price.
   4. Significance of Variances: Evaluate the significance of the variances in terms of the potential to impact future budgeting decisions and planning.

Below are my numbers, thank you in advance!

Milestone One - Cost Classification INSTRUCTIONS: Putting an X in the appropriate spot, classify the costs as: Direct Material, Direct Labor, Overhead, or Period Costs. The Fixed and Variable cost classifications have been provided for you. Direct Material Direct Labor Item/Cost Overhead Period Costs Fixed Variable X Salary - Collar maker Salary - Leash maker Salary - Harness maker XIX: X Salary - Receptionist High-tensile strength nylon webbing Polyesterylon ribbons X X Buckles made of cast hardware Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording price tags X Office supplies Oter business equipment Loan payment Salary to self Milestone One - Variable and Fixed Costs - Collars Item riable Costilte High-tensile strength nylon webbinc $ 4.00 Polyesterinylon ribbons $ 3.00 Buckles made of cost hardware $ 2.00 Price tage $ 0.10 Ite Collar maker's polary (monthly) Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loon payment Salary to sell Fired Costs $ 2,560.00 $ 55.00 $ 250.00 $ 200.00 $ 400.00 $ 183.33 $ 166.67 Total Variable Costs per C$ 9.10 Total Fired Costs $ 3.815.00 Leashes Ite riable Costite High-tensile strength nylon webbinc $ 6.00 Polyesterinylon ribbons 4.50 Buckles made of cast hardware $ 1.50 $ 0.10 Ite Leash maker's salary (monthly) Depreciation on pawing machines Rent Utilities and insurance Scissors, thread, and cording Loon payment Salary to sell Fired Costs $ 2,560.00 $ 55.00 $ 250.00 $ 200.00 $ 400.00 183.33 $ 166.67 Price tago Total Variable Costs per L_1 12.10 Total Fired Costs $ 3.815.00 Harnesses Ite riable Costite High-tensile strength nylon webbinc $ 6.00 Polyesterylon ribbons $ 4.50 Buckles made of cost hardware $ 4.00 Price tago $ 0.10 Ite Harnego maker's salary Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan Salary to self Fired Costs $ 2,560.00 $ 55.00 $ 250.00 $ 200.00 $ 400.00 $ 183.33 $ 166.67 Total Variable Costs per H1 14.60 Total Fixed Costs $ 3.815.00 Milestone Two-Contribution Margin Analysis Sales Price per Unit Variable Cost per Unit Contribution Margin COLLARS $ 28.00 9.10 18.90 LEASHES $ 30.00 12.10 17.90 HARNESSES $ 35.00 14.60 20.40 Milestone Two - Break-Even Analysis COLLARS LEASHES HARNESSES 35.00 Sales Price $ 24.00 $ 22.00 $ Fixed Costs $ 4,028 $ 4,028 $ 4,202 Contribution Margin $ 14.90 $ 9.90 $ 20.40 Break-Even Units (round up) 271.00 407.00 206.00 Target Profit $ 300.00 $ 400.00 $ 500.00 Break-Even Units (round up) 291.00 448.00 231.00 Target Profit $ 500.00 $ 600.00 $ 650.00 Break-Even Units (round up) 304.00 468.00 238.00 Milestone Three - Statement of Cost of Goods Sold 0 Beginning Work in Process Inventory Direct Materials: Materials: Beginning Add: Purchases for month of January Materials available for use Deduct: Ending materials Materials Used 0 $20,000.00 $20,000.00 $4,000.00 $ 16,000 Direct Labor Overhead Total Costs $8,493 $3,765 $28,258.33 Deduct: Ending Work in Process Inventory 0 Cost of Goods Sold $ 28,258.33 Milestone Three - Income Statement Revenue: Collars Leashes Harnesses $15,840.00 $12,320.00 $17,500.00 Total Revenue: Cost of goods sold Gross profit $45,660.00 $28,258.33 $17,401.67 Expenses: General and administrative salaries Depreciation Rent Utilities and insurance Scissors, thread, and cording Loan $2,450 $165.00 $750.00 $600.00 $1,200.00 $550.00 Total Expenses $ 5,715.00 Net Income/Loss $ 4,046.67 Milestone Three - Variance Analysis Data for Variance Analysis: Budgeted (Standard) Hours/Qty Budgeted (Standard) Rate Actual Hours/Qty Actual Rate Labor 160 $ 16.00 180 $ 16.50 Materials 600 $ 9.10 660 S 10.00 Variances for Collar Sales Favorable/ Unfavorable Variance Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate $ 320.00 Unfavorable Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours $ 90.00 Unfavorable Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) x Standard Price $ 546.00 Unfavorable Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity $ U 594.00 Unfavorable