Part One: Basic Overhead Expenses

In the case exercise, Nunes estimated many of the fixed costs of the Ankh Collection as annual costs. Identify the annual costs of each item below, and then calculate the monthly amount.

Most of the fixed costs will begin as soon as Nunes starts working on the collection, but not all of them. Use the notes column to state which month each of the costs will begin.

Use the notes column to state which costs might be charged less often (e.g. annual or twice a year).

Part Two: Sample Manufacturing Costs

Nunes will need to create samples for her sales representative to take to the trade shows. The calculation of the cost of manufacturing the samples is somewhat complicated, because she expects to have a larger collection (i.e. more pieces) each season.

The first step is to create a table showing how many unique design pieces are included in each collection. Because of the long cycle for creating collections, the model needs to have 4 years of seasonal collections.

The second step is to identify from the case exercise how many samples are required for each unique design piece. Also note the average price (Revenue Model template) and percentage required for materials and labor for the samples (Variable Costs template).

Number of samples per piece

Average Ankh Collection price (wholesale)

COGS as percentage of price

Finally, calculate the sample costs for each season. Below the sample costs line are the months when samples are made and the sample costs are paid for the fall and spring collections (Based on Exhibit 3 in the case).

Attachment:- Ankh LLC.xls