Silllll 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: 0 Materials purchased: $20,000 0 Consumed 80% of the purchased materials 0 Direct labor: $8,493.33 0 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. Established Sales Price Number of Items Sold per Day The other costs incurred by the business include: a General and administrative salaries o Receptionist: $1,950 0 Owner salary: $500 Depreciation: $165 Rent: $750 Utilities and insurance: $600 Scissors, thread, and cording: $1,200 Loan repayment: $550 snhu Variance At the end of the month, you find that the labor and materials spent on manufacturing collars was different from what you estimated: a The collar maker had to work nine hours a day instead of eight due to an increased demand for collars. 0 Because of the increased demand, the hourly rate you paid your employee for making the collars increased to $16.50. a An increase in the cost of raw material led the direct material cost per collar to increase to $10. 0 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. Scenario It has now been one month since you launched your business. You are meeting with a few investors soon to share your vision for the company and to ask for more funding. You will be sharing your company's nancial health at this meeting. To do that, you need to determine and analyze your company's performance over the last month using the data provided. Prompt Use the information in the Milestone Three Actual Costs and Revenue Data Appendix Word Document to evaluate your company's performance, and complete the remaining tabs in the mject Workbook Spreadsheet that you used for the Milestone One and Two assignments. Specically, you must address the following rubric criteria: 0 Statement of Cost of Goods Sold: Prepare the statement of cost of goods sold in the \"COGS" tab of the workbook. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table. 0 Income Statement: Use the given revenue data to prepare the \"Income Statement\" tab table and calculate the net income. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table. 0 Variance Analysis: Prepare the data in the \"Variances\" tab to determine whether the variances are favorable or unfavorable. Remember to show your work using calculations to the side of the table or using appropriate formulas in the table. 0 Complete the data table for the variances by entering the budgeted (standard) and actual labor and material values. Remember to use the estimates for expected sales from your Milestone Two assignment. 0 Determine the variances for direct labor and direct materials in the \"Variances\" tab. 0 Evaluate the significance of the variances in the \"Variances\" tab, and mark them as favorable or unfavorable. Milestone One - Variable and Fixed Costs Collars Item Variable Cost/Item Item Fixed Costs High-tensile strength nylon webbing $ 4.00 (12/3=4) Collar maker's salary (monthly) 2,773.33 16*40*52/12 Polyesterylon ribbons 3.00 (9/3=3) Depreciation on sewing machines 55.00 165/3 Buckles made of cast hardware 2.00 (4*0.50=2) Rent 250.00 750*500/1500 Price tags 0.10 1*0.10=0.10) Utilities and insurance 200.00 600/3 Scissors, thread, and cording 400.00 1200/4 Loan payment 183.33 550/3 Salary to self 166.67 500/3 Total Variable Costs per Collar $ 9.10 Total Fixed Costs $ 4,028.33 Leashes Item Variable Cost/Item Item Fixed Costs High-tensile strength nylon webbing $ 6.00 12/2= 6 Leash maker's salary (monthly) 2,773.33 16*40*52/12 Polyesterylon ribbons 4.50 9/2=4.50 Depreciation on sewing machines 55.00 165/3 Buckles made of cast hardware 1.50 3*0.50=1.50 Rent 250.00 750*500/1500 Price tags 0.10 1*0.10=0.10) Utilities and insurance 200.00 600/3 Scissors, thread, and cording 400.00 1200/4 Loan payment 183.33 550/3 Salary to self 166.67 500/3 Total Variable Costs per Leash $ 12.10 Total Fixed Costs $ 4,028.33 Harnesses Item Variable Cost/Item Item Fixed Costs High-tensile strength nylon webbing $ 6.00 12/2=6 Harness maker's salary 2,946.67 17*40*52/12 Polyesterylon ribbon 4.50 9/2=4.5 Depreciation on sewing machines 55.00 165/3 Buckles made of cast hardware 4.00 8*0.50=4 Rent 250.00 750*500/1500 Price tags 0.10 1*0.10=0.10 Utilities and insurance 200.00 600/3 Scissors, thread, and cording 400.00 1200/4 Loan 183.33 550/3 Salary to self 166.67 500/3 Total Variable Costs per Harness $ 14.60 Total Fixed Costs $ 4,201.67Milestone Two - Contribution Margin Analysis COLLARS LEASHES HARNESSES Sales Price per Unit 5 28.00 $ 30.00 $ 35.00 Variable Cost per Unit (9.10) (12.10) (14.60) Contribution Margin $ 18.90 $ 17.90 I $ 20.40 I I Milestone Two - Break-Even Analysis COLLARS LEASHES HARNESSES Sales Price 28.00 S 30.00 S 35.00 Fixed Costs 4,028 S 4,028 S 4,202 Contribution Margin $ 18.90 S 17.90 20.40 Break-Even Units (round up) 213.00 225.00 206.00 Target Profit 300.00 S 400.00 500.00 Break-Even Units (round up) 229.00 247.00 230.00 Target Profit 500.00 S 600.00 650.00 Break-Even Units (round up) 240.00 259.00 238.00Milestone Three - Statement of Cost of Goods Sold Beginning Work in Process Inventory Direct Materials: Materials: Beginning Add: Purchases for month ofJanuarv Materials available for use Deduct: Ending materials Materials Used Direct Labor Overhead Total Costs Deduct: Ending Work in Process Inventory Cost of Goods Sold Milestone Three - Income Statement Revenue: Collars Leashes Hamesses Total Revenue: II Cost of goods sold Gross prot Expenses: General and administrative salaries Depreciation Rent Utilities and insurance Scissors, thread, and cording Loan Total Expenses 95 - Net Income/Loss $ - Milestone Three - Variance Analysis Data for Variance Analysis: Budgeted Budgeted Actual Actual (Standard) (Standard) Hours/Qty Rate Hours/Qty Rate Labor Materials Variances for Collar Sales Favorable/ Variance Unfavorable Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate S Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours S Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) x Standard Price S Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity S