Lemon Ice Tea (3 Gallon)

Material cost:

Black tea=$3

Sugar=$1

Lemon=$8

Ice=$2

Cup= $3

Total cost= $17

3 Gallon= 32 cups(12 oz per cup)

Cost to produce per cup= $0.54

We selling each cup for $2

Time to make this: 1 hour

Use the information above. The last second of your business plan deals with the financial analysis. Since your business is new you will need to have projected financial data. You will project based on one month's data. Use the worksheets to capture the data and include them in your report.

a. Estimate your annual overhead and direct labor hours to obtain your predetermined rate. Explain your calculation. 5 points

b. Using the predetermine rate, assign your overhead for the period. this rate to apply your overhead costs for the month. Explain your assignment of the overhead. You can use the following monthly overhead costs--$500 rent, $300 utilities, and $10.50 per hour labor rate. Add to the estimated overhead any other indirect costs you occur should has purchasing items, etc. 10 points

c. Determine your breakeven production. Give details of how many of your product your will need to break even. 10 points

d. Once you have your breakeven figure, you can then calculate your target goal of $1,000 for the month. Explain your calculation. 5 Points

e. Lastly, once you have actual costs incurred, determine the amount of over-applied or under-applied overhead. 5 Points

f. Using the production data for one month, prepare a formal Cost of Goods Manufactured Schedule. 10 Points