Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Milestone Two: Market Research Data Collars With pricing at $12 per collar, with 33 sold per day Leashes With pricing at $14 per leash, with

Milestone Two: Market Research Data

Collars

With pricing at $12 per collar, with 33 sold per day

Leashes

With pricing at $14 per leash, with 28 sold per day

Harnesses

With pricing at $20 per harness, with 25 sold per day.

Prepare an Income statement, statement of goods sold and variance based off this information and information provided below:

  • Materials purchased: $20,000
    • Consumed 80% of the purchased materials
  • Direct labor: $8,493.33
  • Overhead costs: $3,765

Note: Assume that the beginning materials and ending work in process are zero for the month.

The other costs incurred by the business include:

  • General and administrative salaries
    • Receptionist: $1,950
    • Owner salary: $500
  • Depreciation: $165
  • Rent: $750
  • Utilities and insurance: $600
  • Scissors, thread, and cording: $1,200
  • Loan repayment: $550
  • 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles Volume 2 Chapters 13 To 26

Authors: Jerry J. Weygandt

11th Edition

1118342070, 978-1118342077

More Books

Students also viewed these Accounting questions

Question

How will you establish your definition of reward strategy?

Answered: 1 week ago

Question

2. Give ample praise for good answers.

Answered: 1 week ago