Question: For the Cost Volume Profit Case A.pdf document(the document below), how would you calculate the cost of goods sold? Jane,Rayna,andShivastartedJRSInc.togetherfiveyearsago.JRSInc.makesleatherpursestargetedatprofessionalwomen.WhileShivaisdevotedfulltimetothebusiness,JaneandRaynaarelawyerswithdemandingcareers.Thethreeofthemmetinanundergraduateentrepreneurshipclass,andhavebeenfriendsandbusinesspartnerssincethen.JRSInc.hasbeenmakingprofitsandexpanding.Shivaisnotsurethathecanpullthisoffwithoutafulltimecommitmentfromhistwofriends.JaneandRaynaareinterestedinmakingafulltimeswitchtothebusinessiftheincomefromthebusinessissufficientlyhighthattheycangiveuptheirlucrativesalaries.Theywanttodivedeeperintothenumbersandunderstandwhatdifferentbusinessconditionswouldmeanfortheirbottomline.Theywouldliketheoperatingincometobearound$1,500,000toconsidermakingafulltimeswitch.Theyhavemanyquestionsthatneedtobeanswered.TheyaskedShivatogivethemsomedata.Shivaprovidedthemwiththefollowingdetails.JRSInc.sellswhateveritmakes.Thereisnoworkinprocessorfinishedgoodsinventory.Shivahascollectedsomedatarelatingtothemostrecentyear.Theyincurredmanufacturingcostsof$3,240,000duringtherecentyearwhichincludes$1,200,000formaterials,$800,000forlaborand$1,240,000forothermanufacturingcosts(depreciation,factoryrentandmiscellaneous).Thematerialsandthelaborcanbetracedtoeachpurse.Theothermanufacturingcostsincreasewiththevolumeofpursesbutnotinanexactproportion.JRSInc.paystheirsalesstaffcommissionsof10%onthesalesprice.Theirothergeneraladministrativeexpensesare$960,000ayear.JRSInc.manufacturedandsold12,000leatherpursesatasellingpriceof$500perpurseduringtherecentyear.Shivaisconsideringexpandingtheirproductlinebyaddingleatherbriefcasestotheirproductline.ThemarketingconsultantthatShivahiredconcludedthatthereisdemandfortheirleatherpursesandleatherbriefcases.

For the Cost Volume Profit Case A.pdf document(the document below), how would you calculate the cost of goods sold?

Jane,Rayna,andShivastartedJRSInc.togetherfiveyearsago.JRSInc.makesleatherpursestargetedatprofessionalwomen.WhileShivaisdevotedfulltimetothebusiness,JaneandRaynaarelawyerswithdemandingcareers.Thethreeofthemmetinanundergraduateentrepreneurshipclass,andhavebeenfriendsandbusinesspartnerssincethen.JRSInc.hasbeenmakingprofitsandexpanding.Shivaisnotsurethathecanpullthisoffwithoutafulltimecommitmentfromhistwofriends.JaneandRaynaareinterestedinmakingafulltimeswitchtothebusinessiftheincomefromthebusinessissufficientlyhighthattheycangiveuptheirlucrativesalaries.Theywanttodivedeeperintothenumbersandunderstandwhatdifferentbusinessconditionswouldmeanfortheirbottomline.Theywouldliketheoperatingincometobearound$1,500,000toconsidermakingafulltimeswitch.Theyhavemanyquestionsthatneedtobeanswered.TheyaskedShivatogivethemsomedata.Shivaprovidedthemwiththefollowingdetails.JRSInc.sellswhateveritmakes.Thereisnoworkinprocessorfinishedgoodsinventory.Shivahascollectedsomedatarelatingtothemostrecentyear.Theyincurredmanufacturingcostsof$3,240,000duringtherecentyearwhichincludes$1,200,000formaterials,$800,000forlaborand$1,240,000forothermanufacturingcosts(depreciation,factoryrentandmiscellaneous).Thematerialsandthelaborcanbetracedtoeachpurse.Theothermanufacturingcostsincreasewiththevolumeofpursesbutnotinanexactproportion.JRSInc.paystheirsalesstaffcommissionsof10%onthesalesprice.Theirothergeneraladministrativeexpensesare$960,000ayear.JRSInc.manufacturedandsold12,000leatherpursesatasellingpriceof$500perpurseduringtherecentyear.Shivaisconsideringexpandingtheirproductlinebyaddingleatherbriefcasestotheirproductline.ThemarketingconsultantthatShivahiredconcludedthatthereisdemandfortheirleatherpursesandleatherbriefcases.

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