Sales Price, Costs of Ingredients, Manufacturing Overhead, and Operating Expenses Sales Price: Minimum mark-up on total variable costs: 150% [You can 50 higher} Cost of Raw Materials: What is shown for Direct Materials is an Direct Materials example only. Please use costs in the Cost of Ingredients list. Flour - per cup Eggs - per 833 Butter - per cup' Chips - per cup * 1 stick butter = W cup Direct Labor Costs: Direct labor is $15 ,f hour. Manufacturing Overhead: Fixed Costs (per month): Utilities Other indirect materials and labor Maintenance Depreciation Supervision Totals Operating Expenses' Variable costs Fixed Costs (per dozen): (per month): Salas Commission $0.50 Shipping Costs $1.00 Rent ? Salaries $5,000 Depredation $200 Other $1,800 Totals $7000 plus rent BIBF Cookie Factory Project You are the owner of your own cookie company. Fast growth and the need to expand have made it necessary for you to seek financing from a local bank. However, you need to show the banker your plans for the coming year. Using your own, unique data, you will prepare a comprehensive budget and proforma financial statements to show the banker your projected earnings and financial position. The Cookie Factory Project is designed to be completed individually! ASSIGNMENT 1: You must gain an understanding of your cost structure and the relationship between your revenues, costs, and profits. Review your recipe to see what ingredients it takes to make a dozen cookies. Next, determine the cost of each of the ingredients. Then, brainstorm to develop a list of the new costs that you must incur when you expand your operations. After analyzing the data, you will be able to break out your costs into several categories: raw materials, labor, manufacturing overhead, or operating expenses. Some costs are fixed while other costs are variable. You will generate information to determine how much money you can make when you sell these cookies. 1. Look on the last page to find your cookie. Search the Internet and find a recipe for this type of cookie. Include a link to the recipe in your report next to the name of your cookie. Consult your recipe to determine the amount of ingredients required for one dozen cookies. Consult the Excel file with Exhibit 1 and Measurements & Costs for information regarding the costs of certain ingredients, manufacturing overhead, and operating expenses. If your cookies have ingredients that are not included in file, consult the Baking Center at Walmart https://www.walmart.com/cp/baking/976780 and include a link to the specific product you use. 2. List your direct materials. What is your direct materials cost per dozen? 3. Who is providing the direct labor? How long will it take to make one dozen cookies? Assume that labor has a cost of $15 per hour. What is the direct labor cost per dozen? 4. List the cost for the other items that go into the production of your cookies (i.e. rent, etc.). Assume that you will use this facility for baking: https://fromthefarmtreats.com/berries- bakery-commercial-kitchen.htm. 5. What are your indirect materials? What indirect labor (if any) do you need? What other overhead costs do you have? How will you allocate these costs to your manufacturing process? What is your overhead cost per dozen? 6. How much will you mark up your costs to determine your sales price? At minimum, you must mark-up your total variable costs by 150%. You can go higher, but if so, indicate why. 7. What are your fixed costs? variable costs? mixed costs? List and show the amounts and total.8. What are the new costs that you expect to incur to expand your operations? List and show the amounts. Why are these costs necessary? 9. Calculate the following: a. Total variable costs per dozen cookies. b. Sales price per dozen cookies using "markup on variable costs." c. Contribution margin per dozen cookies. d. Breakeven point for the quarter (three months) in dollars and in units. 10. Short answer questions: a. Exhibit 1 presents your expenses in the categories of raw materials, manufacturing overhead, and operating expenses. What factors make each of the categories different? b. Exhibit 1 indicates which costs are fixed and which costs are variable. For each expense listed, indicate why it would be categorized as fixed or variable. Note: Turn in an Excel file with Exhibit 1 with your cookie costs. Also, turn in a Word file with a link to your recipe and your answers for questions 1-10. Provide detail for your calculations