MILESTONE THREE VARIANCE ANALYSIS

MILESTONE THREE STATEMENT OF COST OF GOODS SOLD

MILESTONE THREE INCOME STATEMENT

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Milestone One - Variable and Fixed Costs Collars Variable Cost/Item Item High-tensile strength nylon webbing $ Polyester/nylon ribbons Buckles made of cast hardware Price tags Item Fixed Costs 4.00 Collar maker's salary (monthly) Depreciation on sewing machines 2,773.33 3.00 55.00 2.00 Rent 250.00 0.10 Utilities and insurance 200.00 Scissors, thread, and cording 400.00 Loan payment 183.33 Salary to self 166.67 Total Variable Costs per Collar 9.10 Total Fixed Costs 4,028.34 Milestone Two: Market Research Data You have conducted some market research for style and size of products you want to use to launch your business. The market research has indicated the following sales price ranges will be optimal for your area depending on style of products you choose to sell: • Collars • With pricing at $20 per collar, you can expect to sell 30 collars per day. o With pricing at $24 per collar, you can expect to sell 25 collars per day. o With pricing at $28 per collar, you can expect to sell 20 collars per day Leashes • With pricing at $22 per leash, you can expect to sell 28 leashes per day. • With pricing at $26 per leash, you can expect to sell 23 leashes per day. • With pricing at $30 per leash, you can expect to sell 18 leashes per day. Harnesses o With pricing at $25 per harness, you can expect to sell 25 harnesses per day. o With pricing at $30 per harness, you can expect to sell 22 harnesses per day. o With pricing at $35 per harness, you can expect to sell 20 harnesses per day. Additionally, you will need to compare your break-even points for the following target profits for each area of your business to determine your prices: Collars O Break-even o $300 target profit each month • $500 target profit each month SSS Milestone One - Variable and Fixed Costs Collars Variable Cost/Item Item High-tensile strength nylon webbing $ Polyester/nylon ribbons Buckles made of cast hardware Price tags Item Fixed Costs 4.00 Collar maker's salary (monthly) Depreciation on sewing machines 2,773.33 3.00 55.00 2.00 Rent 250.00 0.10 Utilities and insurance 200.00 Scissors, thread, and cording 400.00 Loan payment 183.33 Salary to self 166.67 Total Variable Costs per Collar 9.10 Total Fixed Costs 4,028.34 Milestone Two: Market Research Data You have conducted some market research for style and size of products you want to use to launch your business. The market research has indicated the following sales price ranges will be optimal for your area depending on style of products you choose to sell: • Collars • With pricing at $20 per collar, you can expect to sell 30 collars per day. o With pricing at $24 per collar, you can expect to sell 25 collars per day. o With pricing at $28 per collar, you can expect to sell 20 collars per day Leashes • With pricing at $22 per leash, you can expect to sell 28 leashes per day. • With pricing at $26 per leash, you can expect to sell 23 leashes per day. • With pricing at $30 per leash, you can expect to sell 18 leashes per day. Harnesses o With pricing at $25 per harness, you can expect to sell 25 harnesses per day. o With pricing at $30 per harness, you can expect to sell 22 harnesses per day. o With pricing at $35 per harness, you can expect to sell 20 harnesses per day. Additionally, you will need to compare your break-even points for the following target profits for each area of your business to determine your prices: Collars O Break-even o $300 target profit each month • $500 target profit each month SSS

Answer rating: 100% (QA)

Answer Income Statement Revenue Collar 1320000 Leashes S 1232000 Harnesses 1250000 Total Revenue 380... View the full answer