to value her inventory items and would like to know how much money she is making on each product. Your task is to compute the standard inventory cost and gross profit margin for four of her top selling items; Bath$-$Bombs, Mini$-$Bombs, Bomb$-$in$-$a$-$Bag and Bubbling Bath Salts.

In excel, begin with the recipe of direct materials for each item. Create a conversion chart for how bulk weights purchased are converted to direct materials used for each inventory item. Assign direct materials cost to each item. Next, assign direct labor costs based on labor cost per hour and time required to make each item. Don't forget to also add the cost of packaging. Combine the direct materials, direct labor and packaging costs for each item to arrive at a total cost per unit. Finally, using current selling price and cost per unit, calculate gross margin for each of the four inventory items. What is the gross profit when the business owner might run a "buy $4$ get $1$ free" promotional offer? Which item is most profitable? Which item is the least profitable, and why? Calculate the break$-$even unit and sales if the manufacturing overhead cost is $40\%$ from the conversion cost and the fixed operating cost is $20\%$ from the total product cost.

Write a memo to the business owner that describes how you used cost accounting concepts to arrive at your inventory values and gross profit margin amounts. Include your calculations when there is a "buy $4$ get $1$ free" sale. What recommendations do you have for the business owner?

Work together in small groups to decide on a final inventory cost and gross profit amount for BathBombs, Mini$-$Bombs, Bomb$-$in$-$a$-$Bag and Bubbling Bath Salts. Create one final excel costing spreadsheet for the business owner that can be updated if the cost of bulk purchases or sales prices change. How the changes affect the breakeven unit and sales.

Finally, create a power point presentation that you will use when you deliver your presentation of calculations and recommendations on inventory costing to the business owner.

The recipes, costs of direct materials, packaging costs, direct labor time and costs, and sales prices are listed below.