Design a product (not service) of your choice. It might be an existing product that your take on with necessary improvement OR a new product that does not exist in the market. You need to undertake R&D activities to determine the design, characteristics and functions of your product, calculate the related upstream and downstream costs, and provide an explanation as to why you want to produce this product. Then, you need to identify and determine your product's production and downstream costs for 1,000 units manufactured. You also need to determine the price of your product and how it will be marketed. Finally, a presentation is required to provide information about your product and how your product can attract potential customers to make profit.

 Required:

1. Design your product and provide it with a name and a description and visual/picture of it (this can be your own drawing or an image from the internet with your brand/logo assigned to the image). Justify your choice by explaining in detail the reasons why you select your product (i.e. is there a demand for it? will it solve any social, environmental or financial issues? etc.). What is your vision for the selected product?

2. Estimate the product’s Research and Development (R&D) and Design costs (as you will be undertaking the R&D, building a prototype, testing the product. You should assign yourself an hourly wage rate based on market research and keep a record of the activities and how many hours it took you to design your product. This will determine your R&D and Design costs). Provide detailed explanations about your R&D processes/steps and how the selected product is manufactured.

3. Conduct a market research (i.e. search the internet, field research) to identify, estimate and determine the costs of your product's direct materials, direct labor and manufacturing overhead (fixed and variable). Clearly list and determine how much and types of materials, labor and other manufacturing resources will be required to produce one unit of your product and calculate your product’s cost per unit. Explain the approach used to calculate the overhead cost per unit and clearly differentiate/list fixed and variable manufacturing overheads.

4. Upon the nature of your product, in 100 words, identify and justify appropriate type of product costing procedure (job versus process costing, or combination). Please note that you must be consistent with your choice for costing the selected product in the following questions.

5.a. During June, let’s suppose that the cost of your beginning inventory was $10,000 and ending inventory equaled $5,000, and you purchased materials to produce 1,000 units of your product. Calculate the cost of direct materials purchased and used in production in June.

5.b. During June, the cost of your beginning work in process was $5,000, and ending was $10,000. Calculate the cost of goods manufactured using a cost of goods manufactured statement/schedule (for 1,000 units of your product) in June.

5.c. During June, the cost of your beginning finished goods was $20,000 and ending finished goods equaled $10,000. Prepare a cost of goods sold statement for the month of June for 1,000 units produced and sold to customers.

6. Conduct a market research to identify and estimate your downstream activities and the related costs (i.e. marketing, packaging, handling, storing, distribution and so forth). Explain how you will market and distribute your product in detail.

7. Determine the price of your product per unit and explain in detail how you determine the selling price (i.e. cost-plus or customer value-based pricing, see Pricing strategies (Lang field Smith et al., 2018, p.967)).

8. Prepare an income statement (using absorption costing) for the month of June given that 1,000 units were sold. Your administrative expenses in June totaled $4,000, and the Australian company tax rate is 30%. Include all other relevant expenses for the month of June.