This is an elite market reliant on high profile sporting event endorsements and branding. Having reviewed the success of companies such as Nike., proposes to diversify into the general leisure wear market with own version of light-weight sport wear for general leisure use. As this product line will not be elite sport wear. it will be less expensive to produce but, as it is important not to compromise 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: 61.50 per meter (incl of VAT @ 23%) 2meters

Labour: 15 per hour 7

They will aim its product at the quality end of the leisure market and the expected selling price of 300 (exclusive of VAT) per unit will reflect this. 369 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: 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 2022. No other product will be produced or sold during this period. Calculate Sales using this target profit.

Fixed costs Apr May Jun Jul Aug Sep Total

Admin/sales salaries 1,750,000 1,750,000 1,750,000 1,750,000 1,750,000 1,750,000 10,500,000

Light & heat 510,750 510,750 510,750 510,750 510,750 510,750 3,064,500

Selling expenses 1,168,500 1,168,500 1,168,500 1,168,500 1,168,500 1,168,500 7,011,000

Advertising 135,300 135,300 135,300 135,300 135,300 135,300 811,800

Maintenance/repairs 492,000 492,000 492,000 492,000 492,000 492,000 2,952,000

Motor expenses 650,375 650,375 650,375 650,375 650,375 650,375 3,902,250

Office expenses 215,250 215,250 215,250 215,250 215,250 215,250 1,291,500

Depreciation (per depreciation policy) Loan interest (per loan agreement) 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 sales) Expected sales mix per month is expected to be 70% directly to the public via on-line cash sales in 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 2022 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 months 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% June and the remainder in Sept. No new investment in machinery or equipment is required for the next 6 months