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Any company but please make it simple. Create and imaginary company with a product that can be manufactured and sold Keep it a simple product.
Any company but please make it simple.
Create and imaginary company with a product that can be manufactured and sold | ||||||||
Keep it a simple product. Don't pick something with many parts. | ||||||||
You will be describing the making and selling of the product. | ||||||||
Think through the following: | ||||||||
Where will you make it - what costs are involved - materials, labor, rent, etc. | ||||||||
Who will make it. How long will it take. What equipment will you need? | ||||||||
Who do you sell to? How will you get it to your customers? | ||||||||
Will you need to rent a place to sell? Who will get paid to sell? | ||||||||
Sales commissions? Delivery costs, travel costs? | ||||||||
Can you make money? | ||||||||
1 | List all the manufacturing costs? DM, DL Overhead | |||||||
2 | What are the fixed costs? | |||||||
3 | Variable costs? | |||||||
4 | List the non-manufacturing costs - period costs? | |||||||
For example - selling costs, rent, salaries (incl your own) | ||||||||
5 | Determine if you should use job costing or process costing | |||||||
6 | Determine a price to sell for using cost price volume | |||||||
7 | Determine breakeven sales numbers - Try various prices | |||||||
8 | Create a contribution margin income statement CVP | |||||||
9 | Put together a 12 month or 4 quarter budget with all the schedules in Chap 9 | |||||||
Sales budget, production, materials, labor ESPECIALLY Income Statement | ||||||||
10 | Create a summary of what the product is, how you make it, how you sell | |||||||
it, what you charge for it, what the competition is, and if your | ||||||||
budget shows you are going to make money. | ||||||||
I am a potential investor. Convince me to invest in your company. | ||||||||
Make up all numbers for costs and prices but try to keep them reasonable | ||||||||
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