Milestone Three - Income Statement Revenue: Collars Total Revenue: Cost of goods sold Gross profit Expenses: General and administrative salaries $ Office supplies Other business equipment Total Expenses Net Income/Loss Milestone Two - Break-Even Analysis Sales Price Fixed Costs Contribution Margin Break-Even Units (round up) Target Profit Break-Even Units (round up) Target Profit Break-Even Units (round up) $ $300.00 $500.00 $600.00 $ $ $400.00 $500.00 $650.00 Milestone Three - Variance Analysis Data for Variance Analysis: \begin{tabular}{|l|l|l|l|l|} \hline & Budgeted(Standard)Hours/Qty & Budgeted(Standard)Rate & ActualHours/Qty & ActualRate \\ \cline { 2 - 5 } & & & & \\ \hline Mabor & & & & \\ \hline \end{tabular} Variances for Collar Sales Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) x Standard Price Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity C14 fx A B C D E G $ Beginning Work in Process Inventory Direct Materials: Materials: Beginning Add: Purchases for month of January Materials available for use Deduct: Ending materials Materials Used Direct Labor Overhead Total Costs Deduct: Ending Work in Process Inventory 0 9 Add: Purchases for month of January 11 Materials available for use 12 Deduct: Ending materials 21 22 Cost of Goods Sold 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 You have conducted some market research for style and size of products you want to use to launch your business. The market research has indicated the following sales price ranges will be optimal for your area depending on style of products you choose to sell: - Collars With pricing at \$20 per collar, you can expect to sell 30 collars per day. With pricing at \$24 per collar, you can expect to sell 25 collars per day. With pricing at $28 per collar, you can expect to sell 20 collars per day - Leashes With pricing at $22 per leash, you can expect to sell 28 leashes per day. With pricing at $26 per leash, you can expect to sell 23 leashes per day. With pricing at $30 per leash, you can expect to sell 18 leashes per day. - Harnesses With pricing at \$25 per harness, you can expect to sell 25 harnesses per day. With pricing at $30 per harness, you can expect to sell 22 harnesses per day. With pricing at $35 per harness, you can expect to sell 20 harnesses per day. Additionally, you will need to compare your break-even points for the following target profits for each area of your business to determine your prices: - Collars Break-even $300 target profit each month $500 target profit each month - Leashes Break-even $400 target profit each month $600 target profit each month - Harnesses Break-even $500 target profit each month \$650 target profit each month Remember that all break-even and target points must be in whole units (we cannot sell a partial unit). Round up when calculating partial units to ensure costs are covered. Excel tip - use ROUNDUP function Milestone Two - Contribution Margin Analysis COLLARS Sales Price per Unit Variable Cost per Unit Contribution Margin LEASHES HARNESSES