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 o 3 collars per yard of webbing o 2 leashes per yard of webbing o 2 harnesses per yard of webbing Polyester/nylon ribbons$9 per yard of ribbon o 3 collars per yard of ribbon o 2 leashes per yard of ribbon o 2 harnesses per yard of ribbon Buckles made of cast hardware$0.50 per buckle o 4 buckles used per collar o 3 buckles used per leash o 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

Variable and Fixed Costs
Collars
Item	Variable Cost/Item		Item	Fixed Costs
High-tensile strength nylon webbing	$ 4.00		Collar maker's salary (monthly)	$ 2,773.33
Polyester/nylon ribbons			Depreciation on sewing machines
Buckles made of cast hardware			Rent
Price tags			Utilities and insurance
			Scissors, thread, and cording
			Loan payment	$ 183.33
			Salary to self	$ 166.67
Total Variable Costs per Collar			Total Fixed Costs
Leashes
Item	Variable Cost/Item		Item	Fixed Costs
High-tensile strength nylon webbing			Leash maker's salary (monthly)
Polyester/nylon ribbons			Depreciation on sewing machines
Buckles made of cast hardware			Rent
Price tags			Utilities and insurance
			Scissors, thread, and cording
			Loan payment
			Salary to self
Total Variable Costs per Leash			Total Fixed Costs
Harnesses
Item	Variable Cost/Item		Item	Fixed Costs
High-tensile strength nylon webbing			Harness maker's salary
Polyester/nylon ribbons			Depreciation on sewing machines
Buckles made of cast hardware			Rent
Price tags			Utilities and insurance
			Scissors, thread, and cording
			Loan
			Salary to self
Total Variable Costs per Harness			Total Fixed Costs