Milestone One - Variable and Fixed Costs Collars Item High-tensile strength nylon webbing Polyesterylon ribbons Buckles made of cast hardware Price tags Variable Cost/Item $ 4.00 $ 4.50 $ 1.50 $ 0.10 $ $ Item Collar maker's salary (monthly) Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan payment Isalary to self Fixed Costs 2,773.33 55.00 250.00 200.00 400.00 183.33 166.67 $ $ Total Variable costs per Collar $ 9.10 Total Fixed Costs $ 4,492.78 Leashes Item $ High-tensile strength nylon webbing Polyesterylon ribbons Buckles made of cast hardware Price tags Variable Cost/Item $ 6.00 $ 4.50 $ 1.50 0.10 0 0 0 0 $ Item Leash maker's salary (monthly) Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan payment Salary to self . Fixed Costs 2,560.00 55.00 250.00 200.00 400.00 183.33 166.67 $ Harnesses Item Item High-tensile strength nylon webbing Polyesterylon ribbons Buckles made of cast hardware Price tags Variable Cost/Item $ 6.00 $ 4.50 $ 4.00 0.10 Harness maker's salary Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan Salary to self ( V ) ( ) ( ) $ $ $ $ Fixed Costs 2,720.00 55.00 250.00 200.00 400.00 183.33 166.67 Total Variable Costs per Harness $ 14.60 Total Fixed Costs $ 4,652.78 Milestone Two - Contribution Margin Analysis COLLARS LEASHES HARNESSES Sales Price per Unit Variable Cost per Unit Contribution Margin $20.00 $9.10 $10.80 $22.00 $12.10 $25.00 14.60 $9.90 $10.40 collars $9.10-$20.00 = $10.80 Leashes $12.10 -$22.00 = $9.90 Harnesses $14.60 - $25.00 = $10.40 COLLARS LEASHES HARNESSES Sales Price $ 20.00 $ 22.00 $ 25.00 Fixed Costs $ 4,028 $ 4,089 $ 4,266 Contribution Margin $ 10.80 $ 9.90 $ 10.40 Break-Even Units (round up) 370 Units 413 Units 410 Units Target Profit $ 300.00 $ 400.00 $ 500.00 Break-Even Units (round up) 397.00 453.00 458.00 Target Profit $ 500.00 $ 600.00 $ 650.00 Break-Even Units (round up) 415.00 474.00 473.00 $ 0 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 0 Cost of Goods Sold $ 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 $ Data for Variance Analysis: Budgeted (Standard) Hours/Qty Budgeted (Standard) Rate Actual Hours/Qty Actual Rate Labor Materials Variances for Collar Sales Favorable/ Unfavorable Variance Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate Unfavorable Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours Unfavorable Favorable Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) x Standard Price Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity Unfavorable Milestone One - Variable and Fixed Costs Collars Item High-tensile strength nylon webbing Polyesterylon ribbons Buckles made of cast hardware Price tags Variable Cost/Item $ 4.00 $ 4.50 $ 1.50 $ 0.10 $ $ Item Collar maker's salary (monthly) Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan payment Isalary to self Fixed Costs 2,773.33 55.00 250.00 200.00 400.00 183.33 166.67 $ $ Total Variable costs per Collar $ 9.10 Total Fixed Costs $ 4,492.78 Leashes Item $ High-tensile strength nylon webbing Polyesterylon ribbons Buckles made of cast hardware Price tags Variable Cost/Item $ 6.00 $ 4.50 $ 1.50 0.10 0 0 0 0 $ Item Leash maker's salary (monthly) Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan payment Salary to self . Fixed Costs 2,560.00 55.00 250.00 200.00 400.00 183.33 166.67 $ Harnesses Item Item High-tensile strength nylon webbing Polyesterylon ribbons Buckles made of cast hardware Price tags Variable Cost/Item $ 6.00 $ 4.50 $ 4.00 0.10 Harness maker's salary Depreciation on sewing machines Rent Utilities and insurance Scissors, thread, and cording Loan Salary to self ( V ) ( ) ( ) $ $ $ $ Fixed Costs 2,720.00 55.00 250.00 200.00 400.00 183.33 166.67 Total Variable Costs per Harness $ 14.60 Total Fixed Costs $ 4,652.78 Milestone Two - Contribution Margin Analysis COLLARS LEASHES HARNESSES Sales Price per Unit Variable Cost per Unit Contribution Margin $20.00 $9.10 $10.80 $22.00 $12.10 $25.00 14.60 $9.90 $10.40 collars $9.10-$20.00 = $10.80 Leashes $12.10 -$22.00 = $9.90 Harnesses $14.60 - $25.00 = $10.40 COLLARS LEASHES HARNESSES Sales Price $ 20.00 $ 22.00 $ 25.00 Fixed Costs $ 4,028 $ 4,089 $ 4,266 Contribution Margin $ 10.80 $ 9.90 $ 10.40 Break-Even Units (round up) 370 Units 413 Units 410 Units Target Profit $ 300.00 $ 400.00 $ 500.00 Break-Even Units (round up) 397.00 453.00 458.00 Target Profit $ 500.00 $ 600.00 $ 650.00 Break-Even Units (round up) 415.00 474.00 473.00 $ 0 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 0 Cost of Goods Sold $ 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 $ Data for Variance Analysis: Budgeted (Standard) Hours/Qty Budgeted (Standard) Rate Actual Hours/Qty Actual Rate Labor Materials Variances for Collar Sales Favorable/ Unfavorable Variance Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate Unfavorable Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours Unfavorable Favorable Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) x Standard Price Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity Unfavorable