Use the information in the Milestone Three Actual Costs and Revenue Data Appendix Word Document to evaluate your companys 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

o 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 33 x 20 = 660 per month.

Established Sales Price Number of Items Sold per Day

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.

This is the information provided, which values do you mean?

Established Sales Price Collars $20 $24 $28 Leashes $22 $26 $30 Harnesses $25 $30 $35 Number of Items Sold per Day 33 28 23 28 23 18 25 22 20 Collars Item High-tensile strength nylon webbing Polyesterylon ribbons Buckles made of cast hardware Price tags Total Variable Costs per Collar Leashes Item High-tensile strength nylon webbing Polyesterylon ribbons Buckles made of cast hardware Price tags Total Variable Costs per Leash Harnesses Item High-tensile strength nylon webbing Polyesterylon ribbons Buckles made of cast hardware Price tags Total Variable Costs per Harness Variable Cost/Item $ $ $ es is is is 4.00 ($12/3) 3.00 ($9/3) 2.00 (4*0.5) $ 0.10 (given) $ 9.10 Variable Cost/Item $ 6.00 [$12/2] 4.50 [$9/2] $ $ 1.50 (3*0.5) $ 0.10 (given) $ 12.10 Variable Cost/Item $ is is es is isis is in $ $ $ $ 6.00 [$12/2] 4.50 [$9/2] 4.00 (8*0.5) 0.10 (given) 14.60 Item Collar maker's salary (monthly) Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan payment Salary to self Total Fixed Costs Item Leash maker's salary (monthly) Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan payment Salary to self Total Fixed Costs Item Harness maker's salary Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan Salary to self Total Fixed Costs isis es isis is is $ $ $ $ $ $ $ $ $ $ $ is is es isis is is $ $ $ $ $ $ sssssssssss $ $ $ $ $ $ $ Fixed Costs 2,773.33 55.00 250.00 200.00 400.00 183.33 166.67 4,028.33 Fixed Costs 2,773.33 55.00 250.00 200.00 400.00 183.33 166.67 4,028.33 Fixed Costs 2,946.67 55.00 250.00 200.00 400.00 183.33 166.67 4,201.67 Milestone Two - Contribution Margin Analysis COLLARS Sales Price per Unit Variable Cost per Unit Contribution Margin $ $ 20.00 9.10 11.00 $ 10.9 $ LEASHES 22.00 12.10 10.00 $ 9.9 $ HARNESSES 25.00 14.60 10.40 Milestone Two - Break-Even Analysis Sales Price Fixed Costs Contribution Margin Break-Even Units (round up) Target Profit Break-Even Units (round up) Target Profit Break-Even Units (round up) $ $ $ $ $ COLLARS 20.00 4,028 11.00 367.00 300.00 394.00 500.00 412.00 $ $ $ $ $ LEASHES 22.00 4,028 10.00 403.00 400.00 443.00 600.00 463.00 $ $ $ $ HARNESSES 25.00 4,202 10.40 404.00 500.00 453.00 650.00 467.00 Milestone Three - Statement of Cost of Goods Sold Beginning Work in Process Inventory Direct Materials: Materials: Beginning Add: Purchases for month of January Materials available for use Deduct: Ending materials Materials Used Direct Labor Overhead Total Costs Deduct: Ending Work in Process Inventory Cost of Goods Sold 0 $ 0 Milestone Three - Income Statement Revenue: Collars Leashes Harnesses Total Revenue: Cost of goods sold Gross profit Expenses: General and administrative salaries Office supplies Other business equipment Total Expenses Net Income/Loss S $ $ $ $ Milestone Three - Variance Analysis Data for Variance Analysis: Budgeted (Standard) Hours/Qty Labor Materials 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 Budgeted (Standard) Rate S $ $ Actual Hours/Qty Variance Actual Rate Favorable/ Unfavorable