Use the given operational costs in the Milestone One Operational Costs Data Appendix Word Document to complete the first two tabs, Cost Classification and Variable and Fixed Costs, in the Project Workbook Spreadsheet. Specifically, you must address the following rubric criteria: Cost Classification. Accurately classify all your costs in the Cost Classification tab of your workbook. Identify direct material, direct labor, overhead, and period costs.

(Note: Fixed and variable costs have been classified for you.) Variable and Fixed Costs. (Note: Some costs are provided for you. Fill in only the missing costs.) Determine your total variable cost per unit and the total fixed costs for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.

You plan to open a small business for manufacturing pet collars, leashes, and harnesses. You have found a workshop space you can use for sewing your products. After some research and planning, you have estimates for the various operating costs for your business. The total square footage for the sewing rooms is 1,500 square feet broken into three areas (500 square feet each). You have taken out a loan for start-up costs, and the monthly payment is $550; it goes into effect immediately and should be accounted for in your costs. You will also collect a modest salary for the first year of $500 per month; remember to divide evenly among the services. Salary and Hiring Data - One collar maker, who will be paid $16.00 per hour and work 40 hours per week - One leash maker, who will be paid $16.00 per hour and work 40 hours per week - One harness maker, who will be paid $17.00 per hour and work 40 hours per week - One receptionist, who will be paid $15.00 per hour and work 30 hours per week Other Costs - Rent: $750 per month; allocate based on square footage - High-tensile strength nylon webbing $12 per yard of webbing - 3 collars per yard of webbing - 2 leashes per yard of webbing - 2 harnesses per yard of webbing - Polyesterylon ribbons $9 per yard of ribbon - 3 collars per yard of ribbon - 2 leashes per yard of ribbon - 2 harnesses per yard of ribbon - Buckles made of cast hardware $0.50 per buckle - 4 buckles used per collar - 3 buckles used per leash - 8 buckles used per harness - 3 industrial sewing machines at $3,300 each for a total of $9,900; depreciation is $165 per month (5year life, zero salvage value) Collars Total Variable Costs per Collar Total Fixed Costs Leashes Variable Cost/item \begin{tabular}{l} Item \\ \hline Leash maker's salary (monthly) \\ Depreciation on sewing machines \\ Rent \\ Utilities and insurance \\ Scissors, thread, and cording \\ Loan payment \\ Salary to self \end{tabular} Harnesses Item Variable Cost/item Item Foved Costs Polyester/inylon ribbons Harness maker's salary Buckles made of cast hardware Depreciation on sewing machines Rent Price tags Utilities and insurance Scissors, thread, and cording Loan Salary to self Total Variable Costs per Harness Total Fixed Costs Use information from Milestone One and the provided Milestone Two Market Research Data Appendix Word Document to conduct a cost-volume profit analysis. Complete the "Contribution Margin Analysis" and "Break-Even Analysis" tabs in the Project Workbook Spreadsheet that you used for completing the Milestone One assignment. Specifically, you must address the following rubric criteria: - Contribution Margin. Determine your contribution margin per unit in the "Contribution Margin Analysis" tab. - Choose a sales price for each product. - Calculate the contribution margin for each product based on your sales price and the variable cost for that product. Show your work using calculations to the side of the table or using appropriate formulas in the table. - Break-Even Analysis. Use cost-volume-profit (CVP) analysis to determine your break-even points for achieving your target profits in the "Break-Even Analysis" tab. - Determine the break-even points for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table. - Determine break-even units for the suggested target profits for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table. Milestone Two - Contribution Margin Analysis Sales Price per Unit Variable Cost per Unit Contribution Margin Milestone Two - Break-Even Analysis 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 Project Workbook Spreadsheet that you used for the Milestone One and Two assignments. Specifically, you must address the following rubric criteria: - 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. - 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. - 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. - 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. - Determine the variances for direct labor and direct materials in the "Variances" tab. - Evaluate the significance of the variances in the "Variances" tab, and mark them as favorable or unfavorable. 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 Project Workbook Spreadsheet that you used for the Milestone One and Two assignments. Specifically, you must address the following rubric criteria: - 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. - 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. - 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. - 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. - Determine the variances for direct labor and direct materials in the "Variances" tab. - Evaluate the significance of the variances in the "Variances" tab, and mark them as favorable or unfavorable. 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: - Materials purchased: $20,000 - Consumed 80% of the purchased materials - Direct labor: $8,493 - 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 3320=660 per month. The other costs incurred by the business include: - General and administrative salaries - Receptionist: $1,950 - Office supplies: $200 - Other business equipment: $150 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 collars. - Because of the increased demand, the hourly rate you paid your employee for making the collars increased to $16.50. - An increase in the cost of raw material led the direct material cost per collar to increase to $10. - 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. Milestone Three - Statement of Cost of Goods Sold Milestone Three - Income Statement Data for Variance Anaheic" Variances for Collar Sales Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) x Standard Price Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity