Submit a detailed report to your potential investors and other stakeholders to explain and defend your costing strategies and to share your businesss performance to date. Be sure to effectively communicate with your stakeholders by breaking down concepts and using investor-friendly language to build their trust and confidence.

1. Financial Statements: Using the information in the Milestone Two Market Research Data Appendix, assess your financial performance to date.
   1. Statement of Cost of Goods Sold: Share the statement of cost of goods sold and logically interpret the businesss performance against the provided benchmarks.
   2. Income Statement: Share the income statement and logically interpret the businesss performance against the provided benchmarks.
   3. Variances: Illustrate all variances for the direct labor time and the materials price.
   4. Significance of Variances: Evaluate the significance of the variances in terms of the potential to impact future budgeting decisions and planning.

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 $ 0 20,000 20,000 (4,000) $ 16,000 Direct Labor Overhead Total Costs 8,493 3,765 $ 28,258 Deduct: Ending Work in Process Inventory 0 Cost of Goods Sold $ 28,258.33 A B C D E Milestone Three - Income Statement $ Revenue: Collars Leashes Harnesses 12,880 10,800 14,000 $ Total Revenue: Cost of goods sold Gross profit 37,680 (28,258) 9,422 $ $ Expenses: General and administrative salaries Depreciation Rent Utilities and insurance Scissors, thread, and cording Loan (2,450) (165) (750) (600) $(1,200.00) (550) Total Expenses $ 5,715.00 Net Income/Loss $ 3,706.67 D G H Variances for Collar Sales Favorable/ Unfavorable Variance Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate $ 293.34 Unfavorable Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours $ 329.94 Unfavorable Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) Standard Price $ (14,828.42) Favorable Direct Materials Price Variance (Actual Price - Standard Price) Actual Quantity $ 10,828.80 Unfavorable 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 $ 0 20,000 20,000 (4,000) $ 16,000 Direct Labor Overhead Total Costs 8,493 3,765 $ 28,258 Deduct: Ending Work in Process Inventory 0 Cost of Goods Sold $ 28,258.33 A B C D E Milestone Three - Income Statement $ Revenue: Collars Leashes Harnesses 12,880 10,800 14,000 $ Total Revenue: Cost of goods sold Gross profit 37,680 (28,258) 9,422 $ $ Expenses: General and administrative salaries Depreciation Rent Utilities and insurance Scissors, thread, and cording Loan (2,450) (165) (750) (600) $(1,200.00) (550) Total Expenses $ 5,715.00 Net Income/Loss $ 3,706.67 D G H Variances for Collar Sales Favorable/ Unfavorable Variance Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate $ 293.34 Unfavorable Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours $ 329.94 Unfavorable Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) Standard Price $ (14,828.42) Favorable Direct Materials Price Variance (Actual Price - Standard Price) Actual Quantity $ 10,828.80 Unfavorable