G H. Sept Total D 1 Forecast trading, profit and loss account by month for 6 months ended 30th September 2021, contribution format 2 Apr May Jun Jul Aug 3 Sales units 5 6 Selling price per unit 7 Sales revenue 8 Less Direct variable costs 9 Materials per unit 10 Materials cost 11 Labour per unit 12 Labour cost 13 Total variable cost 14 Contribution 15 16 Less fixed costs 17 Admin/sales salaries 18 Light & heat 19 Selling expenses 20 Advertising 21 Maintenance/repairs 22 Motor/petrol exps 23 Office expenses 24 Depreciation 25 Loan interest 26 Endorsement fees 27 Total fixed costs 28 29 Profit/(loss) 30 31 32 Workings for forecast trading, profit and loss account 33 Appendix 2 - Financial projections for six months ended 30th September 2021 Go Online Cloud 9 produce high quality, durable, branded sport shoes for athletes. This is an elite market reliant on high profile sporting event endorsements and branding. Having reviewed the success of companies such as Nike., Go Online proposes to diversify into the general leisure wear market with Cloud 9's own version of light-weight sport shoes for general leisure use. As this product line will not be elite sport shoes. it will be less expensive to produce but, as it is important not to compromise Cloud 9's quality reputation, it will still be more expensive to produce than competitor products. Direct costs per unit are forecast as... Cost type Per unit Materials: 43 per meter (incl of VAT @ 23%) 2meters Labour: 15 per hour 7 hours Go Online will aim its product at the quality end of the leisure market and the expected selling price of 250 (exclusive of VAT) per unit will reflect this. 307.50 inclusive of VAT As it also envisages that the product line expanding in the future Go Online has provisionally signed up two well-known online 'influencers' to promote the product and enhance its marketability for the next six months. These influencers will each be paid 25,000 + VAT @ 23% per month for the promotion campaign. Other cost projections to be considered are: Fixed costs October November December January Admin/sales salaries 1,750,000 1,750,000 1,750,000 1,750,000 Light & heat 510,750 510,750 510,750 510,750 Selling expenses 1,168,500 1,168,500 1,168,500 1,168,500 Advertising 135,300 135,300 135,300 135,300 Maintenance/repairs 492,000 492,000 492,000 492,000 Motor expenses 650,375 650,375 650,375 650,375 Office expenses 215,250 215,250 215,250 215,250 Depreciation (per depreciation policy) Loan interest (per loan agreement) February March Total 1,750,000 1,750,000 10,500,000 510,750 510,750 3,064,500 1,168,500 1,168,500 7,011,000 135,300 135,300 811,800 492,000 492,000 2,952,000 650,375 650,375 3,902,250 215,250 215,250 1,291,500 Note: The following cost projections have been stated inclusive of VAT as follows: VAT @ 23% VAT @ 13.5% Selling expenses Light & heat Advertising Petrol Maintenance & repairs Motor expenses (note: 1,872,750 relates to petrol costs) Office expenses In order for this line to be considered successful, it must produce a profit of 12,000,000 by the end of September 2021. No other product will be produced or sold during this period. Calculate Sales using this target profit. The sales volume required to meet the profit target will be achieved incrementally as follows: Month Apr 10% May 10% Jun 10% Jul 10% Aug 20% Sept 40% (For example Apr sales will be 10% of the annual sales) Expected sales mix per month is expected to be 70% directly to the public via on-line cash sales in Cloud 9's existing on-line store and 30% credit sales on 30 day credit to retail outlets. It is expected that 50% of credit sales receipts will be received in the month following the sale with the remaining 50% received the following month. Inventory on hand @ 31st March 2021 cannot be used in the new product line. Material for the new production line will be bought in at the start of each month in the required amount to meet that month's sales. No inventory of material will be held. All material will be purchased on 30 day credit and paid for in the month following purchase. All operating expenses will be paid in the month incurred. Endorsement fees will accrue over the six months and be paid 50% payable June and the remainder in September No new investment in machinery or equipment is required for the next 6 months. G H. Sept Total D 1 Forecast trading, profit and loss account by month for 6 months ended 30th September 2021, contribution format 2 Apr May Jun Jul Aug 3 Sales units 5 6 Selling price per unit 7 Sales revenue 8 Less Direct variable costs 9 Materials per unit 10 Materials cost 11 Labour per unit 12 Labour cost 13 Total variable cost 14 Contribution 15 16 Less fixed costs 17 Admin/sales salaries 18 Light & heat 19 Selling expenses 20 Advertising 21 Maintenance/repairs 22 Motor/petrol exps 23 Office expenses 24 Depreciation 25 Loan interest 26 Endorsement fees 27 Total fixed costs 28 29 Profit/(loss) 30 31 32 Workings for forecast trading, profit and loss account 33 Appendix 2 - Financial projections for six months ended 30th September 2021 Go Online Cloud 9 produce high quality, durable, branded sport shoes for athletes. This is an elite market reliant on high profile sporting event endorsements and branding. Having reviewed the success of companies such as Nike., Go Online proposes to diversify into the general leisure wear market with Cloud 9's own version of light-weight sport shoes for general leisure use. As this product line will not be elite sport shoes. it will be less expensive to produce but, as it is important not to compromise Cloud 9's quality reputation, it will still be more expensive to produce than competitor products. Direct costs per unit are forecast as... Cost type Per unit Materials: 43 per meter (incl of VAT @ 23%) 2meters Labour: 15 per hour 7 hours Go Online will aim its product at the quality end of the leisure market and the expected selling price of 250 (exclusive of VAT) per unit will reflect this. 307.50 inclusive of VAT As it also envisages that the product line expanding in the future Go Online has provisionally signed up two well-known online 'influencers' to promote the product and enhance its marketability for the next six months. These influencers will each be paid 25,000 + VAT @ 23% per month for the promotion campaign. Other cost projections to be considered are: Fixed costs October November December January Admin/sales salaries 1,750,000 1,750,000 1,750,000 1,750,000 Light & heat 510,750 510,750 510,750 510,750 Selling expenses 1,168,500 1,168,500 1,168,500 1,168,500 Advertising 135,300 135,300 135,300 135,300 Maintenance/repairs 492,000 492,000 492,000 492,000 Motor expenses 650,375 650,375 650,375 650,375 Office expenses 215,250 215,250 215,250 215,250 Depreciation (per depreciation policy) Loan interest (per loan agreement) February March Total 1,750,000 1,750,000 10,500,000 510,750 510,750 3,064,500 1,168,500 1,168,500 7,011,000 135,300 135,300 811,800 492,000 492,000 2,952,000 650,375 650,375 3,902,250 215,250 215,250 1,291,500 Note: The following cost projections have been stated inclusive of VAT as follows: VAT @ 23% VAT @ 13.5% Selling expenses Light & heat Advertising Petrol Maintenance & repairs Motor expenses (note: 1,872,750 relates to petrol costs) Office expenses In order for this line to be considered successful, it must produce a profit of 12,000,000 by the end of September 2021. No other product will be produced or sold during this period. Calculate Sales using this target profit. The sales volume required to meet the profit target will be achieved incrementally as follows: Month Apr 10% May 10% Jun 10% Jul 10% Aug 20% Sept 40% (For example Apr sales will be 10% of the annual sales) Expected sales mix per month is expected to be 70% directly to the public via on-line cash sales in Cloud 9's existing on-line store and 30% credit sales on 30 day credit to retail outlets. It is expected that 50% of credit sales receipts will be received in the month following the sale with the remaining 50% received the following month. Inventory on hand @ 31st March 2021 cannot be used in the new product line. Material for the new production line will be bought in at the start of each month in the required amount to meet that month's sales. No inventory of material will be held. All material will be purchased on 30 day credit and paid for in the month following purchase. All operating expenses will be paid in the month incurred. Endorsement fees will accrue over the six months and be paid 50% payable June and the remainder in September No new investment in machinery or equipment is required for the next 6 months