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Materials purchased: $20,000 Consumed 80% of the purchased materials Direct labor: $8,493.38 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 wes 33 per day or 33 x 20 = 660 per month. Established Sales Price Number of items Sold per Day Collar $20 23 $24 28 $28 Leashes $22 28 $26 23 $30 Harnesses $25 25 $30 22 $35 20 The other costs incurred by the busties includes . General and administrative salaries Receptionist: $1,950 a Owner salary: $SCO 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 callars. Because of the increased demand, the hourly rate you paid your employee for making the collars increased to $16:50 Andreate the cost of ww material led the direct material cost per collar to increase to $10,. However, you also made and sold co nace coasthan you expected to sell in the month. You now need to determine the variance in the materials and labor cost from what you eatimated in Milestone Two bused on the market research data. Milestone Three - Statement of Cost of Goods Sold 3 0 5 Beginning Work in Process Inventory 7 Direct Materials: 8 Materials: Beginning 9 Add: Purchases for month of January 11 Materials available for use 12 Deduct: Ending materials 14 Materials Used 15 16 Direct Labor 17 Overhead A 19 Total Costs 20 21 Deduct: Ending Work in Process Inventory 22 23 Cost of Goods Sold 24 25 26 27 28 29 30 31 32 33 34 3 PROTECTED VIEW Be care Total Revenue: X B Milestone Three - Income Statement S Revenue Collars Leashes Harnesses SI Total Revenue Cost of goods sold Gross profit S 7. Expenses 5 General and administrative salaries 6 Depreciation 7 Rent 8 Utilities and insurance 19 Scissors, thread, and cording 20 Loan 21 22 Total Expenses 23 24 Net Income/Loss 25 26 27 $ $ 29 30 31 32 33 34 35 36 37 38 39 B Milestone Three - Variance Analysis Data for Variance Analysis: Actual Budgeted (Standard) Hours/Qty Budgeted (Standard) Rate Actual Hours/Qty Rate 5 7 8 Labor 9 10 11 Materials 12 13 14 15 Variances for Collar Sales Favorable Unfavorable Variance 16 17 Direct Labor Time Variance 18 (Actual Hours - Standard Hours) x Standard Rate 19 $ $ 20 Direct Labor Rate Variance 21 (Actual Rate - Standard Rate) x Actual Hours 22 23 Direct Materials Quantity/Efficiency Variance 24 (Actual Quantity - Standard Quantity) Standard Price 25 26 Direct Materials Price Variance 27 (Actual Price - Standard Price) x Actual Quantity 28 $ $ 29 30 31 32 33