NEED:
MILESTONE THREE VARIANCE ANALYSIS
MILESTONE THREE STATEMENT OF COST OF GOODS SOLD
MILESTONE THREE INCOME STATEMENT
PLEASE INCLUDE ALL EASY TO READ EXCEL FORMULAS
PLEASE INCLUDE EXCEL FORMULAS FOR ALL Milestone One - Variable and Fixed Costs Collars Item Variable Cost/Item High-tensile strength nylon webbing $ 4.00 Polyesterylon ribbons $ 3.00 Buckles made of cast hardware $ 2.00 Price tags $ 0.10 $ Item Collar maker's salary (monthly) Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan payment Salary to self Fixed Costs 2,773.33 55.00 250.00 200.00 400.00 183.33 166.67 $ Total Variable Costs per Collar 9.10 Total Fixed Costs 4,028.34 Milestone Two: Market Research Data 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 o With pricing at $20 per collar, you can expect to sell 30 collars per day. o With pricing at $24 per collar, you can expect to sell 25 collars per day. o With pricing at $28 per collar, you can expect to sell 20 collars per day Leashes o With pricing at $22 per leash, you can expect to sell 28 leashes per day. o 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 o With pricing at $25 per harness, you can expect to sell 25 harnesses per day. o With pricing at $30 per harness, you can expect to sell 22 harnesses per day. o 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 o Break-even o $300 target profit each month o $500 target profit each month Milestone Two - Contribution Margin Analysis $ COLLARS 28.00 9.10 $ LEASHES 30.00 12.10 $ HARNESSES 35.00 14.60 Sales Price per Unit Variable Cost per Unit Contribution Margin 5 18.90 5 17.90 $ 20.40 Milestone Two - Break-Even Analysis COLLARS 28.00 LEASHES 30.00 HARNESSES $ 35.00 Sales Price $ Fixed Costs $ 4,028 $ 4,028 s 4,202 $ 18.90 $ 1790 $ 20.40 Contribution Margin Break-Even Units (round up) 214 226 206 300.00 $ 400.00 $ s 500.00 Target Profit Break-Even Units (round up) 230 248 231 Target Profit 500.00 600.00 $ 650.00 Break-Even Units (round up 240 259 238 Milestone Three - Variance Analysis Data for Variance Analysis: Budgeted (Standard) Hours/Qty Budgeted (Standard) Rate Actual Hours/Qty Actual Rate Labor Materials Variances for Collar Sales Variance Favorable/ Unfavorable Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate Direct Labor Rate variance (Actual Rate - Standard Rate) Actual Hours Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) * Standard Price Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity ACC 202 Milestone Three: Actual Costs and Revenue Data Appendix At the end of the first month of opening your business, you calculate the actual operating costs of the business and the income you earned. You also notice and document the difference in what you budgeted for certain materials and labor against the actual amounts you spent on the same For your statement of cost of goods sold, use the following data regarding the actual costs incurred by the business over the past month: 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. Use the following revenue and cost information for the income statement. Note that the revenue you use will depend on the pricing level options you chose in Milestone Two. Also, assume that after accounting for weekends and other holidays, there were 20 business days in the first month of operation. For example, if you chose a sales price of $20 per collar, the actual number of collars sold in the month was 33 per day or 33 x 20 = 660 per month Number of items Sold per Day Established Sales Price Collars $20 $24 $28 Leashes $22 33 28 23 $26 28 23 18 $30 Harnesses $25 $30 $35 |||| 25 22 20 The other costs incurred by the business include: General and administrative salaries o Receptionist: $1,950 o 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. You now need to determine the variance in the materials and labor cost from what you estimated in Milestone Two based on the market research data 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 Direct Labor Overhead Total Costs Deduct: Ending Work in Process Inventory 0 Cost of Goods Sold Milestone Three - Income Statement $ Revenue: Collars Leashes Harnesses $ Total Revenue: Cost of goods sold Gross profit $ $ Expenses: General and administrative salaries Depreciation Rent Utilities and insurance Scissors, thread, and cording Loan III Total Expenses $ Net Income/Loss $ PLEASE INCLUDE EXCEL FORMULAS FOR ALL Milestone One - Variable and Fixed Costs Collars Item Variable Cost/Item High-tensile strength nylon webbing $ 4.00 Polyesterylon ribbons $ 3.00 Buckles made of cast hardware $ 2.00 Price tags $ 0.10 $ Item Collar maker's salary (monthly) Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan payment Salary to self Fixed Costs 2,773.33 55.00 250.00 200.00 400.00 183.33 166.67 $ Total Variable Costs per Collar 9.10 Total Fixed Costs 4,028.34 Milestone Two: Market Research Data 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 o With pricing at $20 per collar, you can expect to sell 30 collars per day. o With pricing at $24 per collar, you can expect to sell 25 collars per day. o With pricing at $28 per collar, you can expect to sell 20 collars per day Leashes o With pricing at $22 per leash, you can expect to sell 28 leashes per day. o 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 o With pricing at $25 per harness, you can expect to sell 25 harnesses per day. o With pricing at $30 per harness, you can expect to sell 22 harnesses per day. o 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 o Break-even o $300 target profit each month o $500 target profit each month Milestone Two - Contribution Margin Analysis $ COLLARS 28.00 9.10 $ LEASHES 30.00 12.10 $ HARNESSES 35.00 14.60 Sales Price per Unit Variable Cost per Unit Contribution Margin 5 18.90 5 17.90 $ 20.40 Milestone Two - Break-Even Analysis COLLARS 28.00 LEASHES 30.00 HARNESSES $ 35.00 Sales Price $ Fixed Costs $ 4,028 $ 4,028 s 4,202 $ 18.90 $ 1790 $ 20.40 Contribution Margin Break-Even Units (round up) 214 226 206 300.00 $ 400.00 $ s 500.00 Target Profit Break-Even Units (round up) 230 248 231 Target Profit 500.00 600.00 $ 650.00 Break-Even Units (round up 240 259 238 Milestone Three - Variance Analysis Data for Variance Analysis: Budgeted (Standard) Hours/Qty Budgeted (Standard) Rate Actual Hours/Qty Actual Rate Labor Materials Variances for Collar Sales Variance Favorable/ Unfavorable Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate Direct Labor Rate variance (Actual Rate - Standard Rate) Actual Hours Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) * Standard Price Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity ACC 202 Milestone Three: Actual Costs and Revenue Data Appendix At the end of the first month of opening your business, you calculate the actual operating costs of the business and the income you earned. You also notice and document the difference in what you budgeted for certain materials and labor against the actual amounts you spent on the same For your statement of cost of goods sold, use the following data regarding the actual costs incurred by the business over the past month: 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. Use the following revenue and cost information for the income statement. Note that the revenue you use will depend on the pricing level options you chose in Milestone Two. Also, assume that after accounting for weekends and other holidays, there were 20 business days in the first month of operation. For example, if you chose a sales price of $20 per collar, the actual number of collars sold in the month was 33 per day or 33 x 20 = 660 per month Number of items Sold per Day Established Sales Price Collars $20 $24 $28 Leashes $22 33 28 23 $26 28 23 18 $30 Harnesses $25 $30 $35 |||| 25 22 20 The other costs incurred by the business include: General and administrative salaries o Receptionist: $1,950 o 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. You now need to determine the variance in the materials and labor cost from what you estimated in Milestone Two based on the market research data 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 Direct Labor Overhead Total Costs Deduct: Ending Work in Process Inventory 0 Cost of Goods Sold Milestone Three - Income Statement $ Revenue: Collars Leashes Harnesses $ Total Revenue: Cost of goods sold Gross profit $ $ Expenses: General and administrative salaries Depreciation Rent Utilities and insurance Scissors, thread, and cording Loan III Total Expenses $ Net Income/Loss $
