STEP #1 Write a description of your product with at least three material components. This product should be either an original product or a substantial modification to an existing product.

STEP #2 Develop the standard cost for one unit of your product. Include the bill of materials (material prices can be found online). Develop an Operations Flow Document detailing the departments that this product will pass through during the manufacturing process. This can be done either as a written description or using a flowchart. Indicate if you are using a job order, process or hybrid costing system. Estimate the amount of time each unit will remain in each department or process. The labor rate should be $12.00 per hour. Develop a realistic Overhead Budget for your company. Set a monthly factory rent expense; between $5,000 - $10,000 per month. Your overhead amounts should be detailed out by expense type. Estimate the number of units that you expect to produce and calculate the predetermined overhead rate for use in the standard cost.

STEP #3 Set a realistic selling price for your product; either use target costing or a mark-up approach. Compare prices of similar products on the market. Explain the process you went through in determining your price and provide the comparative prices. Develop a pro-forma income statement You will set the demand for your product. You can borrow up to $1,000,000 to finance your company and be sure to set the interest rate. Include your salary and other Selling & Administrative expenses (ex. Marketing). Write a summary of the feasibility of your product based upon the pro-forma income statement and discuss what hurdles you may encounter in order to enter the market. Its possible you may have a loss in the first few years, so what changes can be implemented in order to have a profit?