M3A2: Cost Drivers
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CostDriversPeerDiscussionPosts.docxCost Drivers Peer Discussion Posts
1.) Tamara Marquis posted Oct 21, 2017 4:41 PM
The materials needed to produce a single batch of caramels for sale are cream, butter, salt, sugar, corn syrup, cellophane wrappers, and bags. I have calculated the cost of each item as follows: $1.50 per cup cream, $0.12 per tablespoon butter, $0.33 per teaspoon salt, $0.24 per cup sugar, $0.31 per ¼ cup corn syrup, $0.02 per wrapper, and $0.06 per bag. To make a medium batch of caramels, which will result in 16 units for sale, I will need to use 5 cups cream 25 tablespoons butter 10 teaspoon salt, 7 ½ cup sugar, 1 ¼ cup corn syrup, 800 wrappers, and 16 bags. The total direct materials cost to make the batch is $34.11, and the total direct cost per unit is $2.13.
To cook the caramels will only require one employee making $8.75 an hour and will take 45 minutes. To cut, wrap, weigh and bag will take 1 employee making $8.75 an hour and will take 1 ½ hour. The direct labor costs associated with making the batch is $19.69, and the total direct labor cost per unit is $1.23.
The overhead costs of granite slab, candy thermometer, and measuring cups. I can a granite slab for 250 batches, a candy thermometer for 50 batches, and measuring cups for 50 batches. The granite costs $0.40 per batch, monitor costs $0.24 per batch, and measuring cups $0.20 per batch. The total overhead per batch is $0.84 and per unit is $0.05.
|
Month |
Item sold |
Price |
Revenue |
Direct materials |
Direct labor |
Overhead |
|
January |
1260 |
$7.00 |
$ 8,820.00 |
$ 2,683.80 |
$ 1,549.80 |
$ 63.00 |
|
Feb |
2450 |
$7.00 |
$ 17,150.00 |
$ 5,218.50 |
$ 3,013.50 |
$ 122.50 |
|
March |
1050 |
$7.00 |
$ 7,350.00 |
$ 2,236.50 |
$ 1,291.50 |
$ 52.50 |
|
April |
1900 |
$7.00 |
$ 13,300.00 |
$ 4,047.00 |
$ 2,337.00 |
$ 95.00 |
|
May |
1700 |
$7.00 |
$ 11,900.00 |
$ 3,621.00 |
$ 2,091.00 |
$ 85.00 |
|
June |
1050 |
$7.00 |
$ 7,350.00 |
$ 2,236.50 |
$ 1,291.50 |
$ 52.50 |
|
July |
1050 |
$7.00 |
$ 7,350.00 |
$ 2,236.50 |
$ 1,291.50 |
$ 52.50 |
|
August |
1050 |
$7.00 |
$ 7,350.00 |
$ 2,236.50 |
$ 1,291.50 |
$ 52.50 |
|
Sep. |
1260 |
$7.00 |
$ 8,820.00 |
$ 2,683.80 |
$ 1,549.80 |
$ 63.00 |
|
October |
1680 |
$7.00 |
$ 11,760.00 |
$ 3,578.40 |
$ 2,066.40 |
$ 84.00 |
|
November |
2850 |
$7.00 |
$ 19,950.00 |
$ 6,070.50 |
$ 3,505.50 |
$ 142.50 |
|
December |
3360 |
$7.00 |
$ 23,520.00 |
$ 7,156.80 |
$ 4,132.80 |
$ 168.00 |
|
Total |
20660 |
|
$ 144,620.00 |
$ 44,005.80 |
$ 25,411.80 |
$ 1,033.00 |
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M3 Assignment 2 Discussion
2.) Tramaine Ashford posted Oct 18, 2017 5:30 PM
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|
Dollar Amount Charged |
Total anticipated revenue |
Sales by the month |
Annual Total |
|
|
10 Individual Clients/Full Coverage |
$150.00 |
$1500 |
150 x 10 |
$18,000.00 |
|
5 Military Veterans/Full Coverage |
$135.00 |
$675 |
135 x 5 ( Discount Already included) |
$8,100.00 |
|
3 Elderly/Disabled Clients- Full Coverage |
$135.00 |
$405.00 |
135 x 3 ( Discount Already included) |
$4,860.00 |
|
2 Students/ Liability |
$99.00 |
$198.00 |
99 x 2 ( Discount Already included) |
$2,376.00 |
Total = $33, 336.00 Annually
The materials for the company that are needed are office equipment and supplies, utilities, and employee costs and mortgage, along with coverage for the entire store front. I anticipate that all together the costs are as follows:
Office equipment/Supplies : $15,000 = total cost of start up equipment/supplies
Employee Cost: $250,000 for all employees total
Mortgage: $10,000/month
Water: $2,000/month
Electricity: 8,000/month
The overhead costs that will be necessary are the package the client picks, will decides the rate of insurance per month. The liability insurance of course, will differentiate from full coverage, along with gap insurance. Also I will have discounts for full time college students, military and the elderly/disabled, which will be 10% off the monthly rate of purchase, as well as if a loyal member purchases their insurance in bulk for every 6 months they will receive an additional $250.00 off the total cost.
