ACC 202 Milestone Three: Actual Costs and Revenue Data Appendix
At the end of the first month of opening your business, you calculate the actual operating costs of the business and the income you earned. You also notice and document the difference in what you budgeted for certain materials and labor against the actual amounts you spent on the same.
For your statement of cost of goods sold, use the following data regarding the actual costs incurred by the business over the past month:
· Materials purchased: $20,000
· Consumed 80% of the purchased materials
· Direct labor: $8,493.33
· Overhead costs: $3,765
Note: Assume that the beginning materials and ending work in process are zero for the month.
Use the following revenue and cost information for the income statement. Note that the revenue you use will depend on the pricing level options you chose in Milestone Two. Also, assume that after accounting for weekends and other holidays, there were 20 business days in the first month of operation. For example, if you chose a sales price of $20 per collar, the actual number of collars sold in the month was 33 per day or 33 x 20 = 660 per month.
Established Sales Price
Number of Items Sold per Day
Collars
$20
33
$24
28
$28
23
Leashes
$22
28
$26
23
$30
18
Harnesses
$25
25
$30
22
$35
20
The other costs incurred by the business include:
· General and administrative salaries
· Receptionist: $1,950
· Owner salary: $500
· Depreciation: $165
· Rent: $750
· Utilities and insurance: $600
· Scissors, thread, and cording: $1,200
· Loan repayment: $550
Variance
At the end of the month, you find that the labor and materials spent on manufacturing collars was different from what you estimated:
· The collar maker had to work nine hours a day instead of eight due to an increased demand for collars.
· Because of the increased demand, the hourly rate you paid your employee for making the collars increased to $16.50.
· An increase in the cost of raw material led the direct material cost per collar to increase to $10.
· However, you also made and sold 60 more collars than you expected to sell in the month.
You now need to determine the variance in the materials and labor cost from what you estimated in Milestone Two based on the market research data.
2
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more