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 I . 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 peryard of webbing 2 leashes per yard of webbing 2 harnesses per yard of webbing Polyester/nylon ribbons-$9 per yard of ribbon 0 3 collars per yard of ribbon 2 leashes per yard of ribbon 2 harnesses per yard of ribbon 2 irnesses pe 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 (5- year life, zero salvage value) Utilities and insurance: $600 per month; allocate based on square footage Scissors, thread, cording: $1,200 Price tags: $250 for 2,500 ($0.10 each) Office supplies: $2,400 or $200 per month Other business equipment: $2,000 Loan payment of $550 per month Salary drawn of $500 per month I 8 279 6 2345 Milestone One-Cost Classification INSTRUCTIONS Putting an X in the appropriate spot, classify the costs as: Direct Material, Direct Labor, Overhead, or Period Costs. The Fixed and Variable cost classifications have been provided for you. 9 Item/Cost 12 Salary-Collar maker 13 Salary-Leash maker 14 Salary-Harness maker 15 Salary-Receptionist 16 High-tensile strength nylon webbing 17 Polyester/nylon ribbons 18 Buckles made of cast hardware 19 Depreciation on sewing machines Direct Material Direct Labor Overhead Period Costs Fixed Variable x XXX x x x x 20 Rent 21 Utilities and insurance 22 Scissors, thread, and cording 23 Price tags 24 Office supplies 25 Other business equipment 26 Loan payment 27 Salary to self xxxx xx