Using:

A B D G H Milestone One - Cost Classification 3 4 5 INSTRUCTIONS: 6 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. 8 Direct Direct 9 Item/Cost Material Labor Overhead Period Costs Fixed Variable 12 Salary - Collar maker 16 40 X 13 Salary - Leash maker 16 40 14 Salary - Harness maker 17 40 15 Salary - Receptionist 30 - . . . . . . . . . . 16 High-tensile strength nylon webbing 17 Polyesterylon ribbons 12 X - - - - - 18 Buckles made of cast hardware 9 19 Depreciation on sewing machines 165 X 20 Rent 750 21 Utilities and insurance 600 22 Scissors, thread, and cording 1200 23 Price tags 250 24 Office supplies 2400 - - . . . . . . . ...- 25 Other business equipment 2000 26 Loan payment 550 27 Salary to self 500 Y 28 29 30B F Milestone One - Variable and Fixed Costs Collars Item Variable Cost/Item Item Fixed Costs LO High-tensile strength nylon webbing 5 4.00 Collar maker's salary (monthly) 2,773.33 10 Polyesterylon ribbons 0.50 Depreciation on sewing machines 165.00 11 Buckles made of cast hardware 0.50 Rent 250.00 12 Price tags 0.10 Utilities and insurance 200.00 13 Scissors, thread, and cording 1,200.00 14 Loan payment 183.33 15 Salary to self 166.67 16 17 19 Total Variable Costs per Collar 5.10 Total Fixed Costs $ 4,938.33 20 22 23 Leashes 25 Item Variable Cost/Item Item Fixed Costs 27 High-tensile strength nylon webbing 6.00 Leash maker's salary (monthly) 2,560.00 28 Polyesterylon ribbons 4.50 Depreciation on sewing machines 165.00 29 Buckles made of cast hardware 1.50 Rent 250.00 30 Price tags 0.10 Utilities and insurance 200.00 31 Scissors, thread, and cording 1,200.00 32 Loan payment 183.33 33 Salary to self 166.67 34 35 36 38 Total Variable Costs per Leash 12.10 Total Fixed Costs 4,725.00 $4,725 39 41 Harnesses Item Variable Cost/Item Item Fixed Costs 46 High-tensile strength nylon webbing 5 5.00 Harness maker's salary 2,720.00 47 Polyesterylon ribbons 4.50 Depreciation on sewing machines 165.00 in us it 48 Buckles made of cast hardware 4.00 Rent 250.00 49 Price tags 0.10 Utilities and insurance 200.00 50 Scissors, thread, and cording 1,200.00 Loan 183.33 Salary to self 166.67 Total Variable Costs per Harness $ 14.60 Total Fixed Costs S 4,835.00 lost Variable and Fixed Costs Contribution MarA B C D E F G H 2 3 Milestone Two - Contribution Margin Analysis 4 5 COLLARS LEASHES HARNESSES 8 Sales Price per Unit 20.00 S 22.00 $ 25.00 9 Variable Cost per Unit 9.10 12.10 14.60 11 Contribution Margin S 10.90 S 9.90 S 10.40 12 14 15 16 17 18A B C D E F G H 2 Milestone Two - Break-Even Analysis 3 5 COLLARS LEASHES HARNESSES 7 Sales Price 4.00 S 5.00 8.00 Fixed Costs S 2,773 5 4,725 S 4,885 10 11 Contribution Margin 1.10 2.10 S 3.10 12 13 Break-Even Units (round up) 2,525.00 2,310.00 2,097.00 14 16 17 Target Profit S 300.00 S 400.00 S 500.00 18 19 Break-Even Units (round up) 2,778.00 2,553.00 2,340.00 20 22 23 Target Profit 500.00 S 600.00 S 650.00 24 25 Break-Even Units (round up) 3,030.00 2,805.00 2,592.00 26 28 29 30 31