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Technical Plan

ETNIKO MERCHANDISE

TECHNICAL PLAN

In order for the operation of Etniko Merchandise to have a smooth-sailing introduction to the market and to secure a sustainable post, the entrepreneurs ought to provide a technical plan emphasizing the qualitative details of the different steps in

production; the process flow diagram; plant or work area, selling area layout; property, plant and equipment; production schedule and to detail the quantitative aspects of direct raw material requirements, indirect raw material requirements, direct labor

requirements, cost of production, product cost per unit, finished goods ending inventory, cost of goods sold, merchandise summary and merchandise inventory. From the strategic plans laid in the tables portrayed in the succeeding pages, the five year projection emphasizes the introductory phase which is expected to have its growths in the ensuing years therein.

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Technical Plan

ETNIKO MERCHANDISE

I.

Steps in the Production of Etniko Products

Steps in producing Talahib products Step(s)

1 2 3 4 5 6

Procure the raw materials (talahib) and purchase other inputs (gawgaw(starch), baking soda, dyes, bleach) Set-up the equipment (blender) and utensils (rolling pin, strainer, pales, basins, pressure cooker). Cut the tip of the talahib, and if necessary the bottom if the part is already old. Remove the stalk of the talahib. Cut the leaves into two(2) inches long.

Put the cut talahib into the pressure cooker and add 2 liters of water and 350 grams of baking soda. (The Baking soda will be used for the whole batch) 7 Place the pressure cooker in the range and let the talahib be cooked for 1 hour. 8 After an hour, sift the cooked talahib and let it cool for 5 minutes. 9 Put 2 cups of water and place the talahib in the blender. (10 grams of talahib but maybe increased or lessen depending on the capacity of the blender) 10 Blend for two (2) minutes. When the fiber is extracted, strain it well. 11 Set three (3) water-filled pales for the three series of rinsing. 12 After rinsing, prepare two basins and fill-up with 1 liter of water each. 13 Add 250 ml. bleach for the first basin (first bleaching), and 50 ml. bleach for the second basin. 14 Plunge the rinsed talahib in the first basin and leave for 30 minutes. (While waiting, cook the gawgaw (cassava starch)) 15 For the second bleach, strain the talahib fiber and transfer it to the second basin, let it for 10 minutes. 16 Strain the talahib and mix the gawgaw. Make sure that the gawgaw is evenly distributed. 17 Place the mixture in a plastic cover and spread it evenly and in an approximately 2mm-3mm thickness by using rolling pin. 18 Set it in an area where sunlight is abundant and pick up after an hour. (it depends on the availability of sunlight) 19 Give the talahib fibers to the sewer for it to be converted into final products (bags/pouches/holders) Note: This procedure is for one(1) batch, which is for 1 kilogram of talahib.

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The talahib are cut fresh and processed on the same day to ensure that the extracted fibers are durable. In the production of such. The human resources in the business are equipped with the skills to execute the steps laid down in the table.Technical Plan ETNIKO MERCHANDISE Steps in packaging Step(s) 1 2 3 Purchase materials needed for the packaging (paper bags of different sizes. and eyeglass and pen holders. pouches and coin purses. Etniko Merchandise offers three product lines which are: Bags and laptop/ netbook cases. 55 . Raw materials which are already available and are cheap in the market are used as exemplified in the relatively total cost of raw materials which can be seen in the succeeding pages. durable and quality talahib Etniko products. sticker papers) Print the logo of Etniko in sticker papers and attach it to the paper bags Put the products inside the packages The entrepreneurs have culminated into series of researches to come up with the procedures aimed at producing affordable. one batch is assigned for each product line to get the actual product cost per unit. Though the fresh talahib leaves may be stored for not more than one day because it will eventually wither when exposed. The processes are followed in accordance with the step-bystep order with the actual amounts of raw materials that should be used in the production.

15. Storage If the bottom part is old. 3. Add 2 liters of water and 350 g. Put the cut talahib into the 3 pressure cooker. 20. Add 250 ml. The Process Flow Diagram of the Different Activities of the Business Remarks Description Time (mins) 1. Cut the leaves into two(2) inches 20 long. Cut the tip of the talahib. Strain the talahib 3 21. Plunge the rinsed talahib in the 30 first basin. 23. 12. Set it in an area where sunlight is 60 abundant 24. 45 5.Technical Plan ETNIKO MERCHANDISE II. 8. 18. Set-up the equipment. Packaging 26. and 50 ml. 19. Give the talahib fabrics to the sewer 25. 5 10. Prepare two basins and fill-up 3 with 1 liter of water each. remove too. of 1 baking soda. Sift the cooked talahib. Mix the cooked gawgaw into the 20 talahib fiber 22. 17. Prepare ingredients 3 2. Stand cool. Place the mixture in a plastic 15 cover and spread it evenly and in a desired size by using rolling pin. 7. Remove the stalk. tools and 3 utensils. Blend 2 13. bleach for the first 5 basin (first bleaching).Strain the extracted fiber 5 14. Set three (3) water-filled pales for 5 the three series of rinsing. Put 2 cups of water and place the 1 talahib in the blender. 6. bleach for the second basin. and if 8 necessary 4. Strain the talahib fiber and 10 transfer it to the second basin. Collect 5 25. 56 . Place the pressure cooker in the 60 range. 5 11. 9. Rinse 10 16.

(*) Straining the talahib fiber and transfer it to the second basin. Only the soft parts of the talahib are taken for the final fiber-sheet to be more appealing. The setting up of the final fiber-sheet under the sun light also requires an hour.Technical Plan ETNIKO MERCHANDISE The time required as per the production was based on the hands-on execution of the entrepreneurs on the making of Etniko products. The step that requires the greatest amount of time is the pressurization of the talahib stalks as to soften and fully extract the fibers. 57 . (*) Setting it in an area where sunlight is abundant and (*) Storage. The procedures where delay can be observed are (*) Standing cool the cooked talahib mixtures. (*) Plunging the rinsed talahib in the first basin. Cutting the leaves and the removal of stalk of the talahib also needs more labor hours as these steps are crucial in the making of a quality product.

bleaching. and drying. cooking. The drying area is subject to changes depending on the availability of sunlight provided that a spacious zone will be at hand.Technical Plan ETNIKO MERCHANDISE III. mixing. blending. rolling and flattening. rinsing. ` Layout of Etniko’s Work area The working area comprises eight (8) stations with proximity measures as to the sequence of the steps covered in the production of the Etniko products. 58 . The work areas for “measuring and cutting” and has the more spacious dimensions as the talahib stalks are still raw and bulky to manage. The stations are: measuring and cutting. The mixing phase and the rolling and flattening phase are also adjacent for the continuous process and ease management of extracted fiber (dry). The rinsing and the bleaching stations are adjacent to each other for they both needed water and the output will be used as the input of the bleaching phase. This is the place where the actual length of the stalks would be curtailed for a more ease of processing.

Technical Plan ETNIKO MERCHANDISE Layout of Etniko’s Work area H B F G A C E D E Legend A B C D Measuring and Cutting Cooking Blending Rinsing E F G H Bleaching Mincing Rolling and Flattening Drying 59 .

00 Product (A) Total units to be sold in Year 1 (B) Plus: Desired FG Ending Inventory (C) Less: FG Beginning Inventory (D) No.00 10. of Units to be Produced (E ) Productio n Cost per Unit (F) Total Cost of FG Ending Inventory (G) Bags and Laptop/ Netbook cases Pouches and Coin Purses Eyeglass and Pen holders Total for Year 1 316 544 639 0 0 0 348 598 703 150 50 40 4.900.700.00 2.800.00 2.640.00 2.00 2.060.640. of Units to be Produced (E ) Productio n Cost per Unit (F) Total Cost of FG Ending Inventory (G) Bags and Laptop/ Netbook cases Pouches and Coin Purses Eyeglass and Pen holders Total for Year 3 418 719 845 33 58 66 33 56 66 418 721 845 150 50 40 4.490.00 10.390.Technical Plan ETNIKO MERCHANDISE Table 1: Production Schedule for a Multiple Product Line Business Production Schedule for a Multiple Product Line Business Product (A) Total units to be sold in Year 1 (B) Plus: Desired FG Ending Inventory (C) 32 54 64 Less: FG Beginning Inventory (D) No.00 10. of Units to be Produced (E ) Productio n Cost per Unit (F) Total Cost of FG Ending Inventory (G) Bags and Laptop/ Netbook cases Pouches and Coin Purses Eyeglass and Pen holders Total for Year 2 363 626 735 32 54 64 364 628 737 150 50 40 4.560.800.00 2.950.00 Product (A) Total units to be sold in Year 1 (B) Plus: Desired FG Ending Inventory (C) 33 56 66 Less: FG Beginning Inventory (D) No.00 60 .00 2.950.

00 3. of Units to be Produced (E ) Productio n Cost per Unit (F) Total Cost of FG Ending Inventory (G) 5.00 10.00 Bags and Laptop/ Netbook cases Pouches and Coin Purses Eyeglass and Pen holders Total for Year 4 481 827 972 34 58 68 33 58 66 482 827 974 150 50 40 Product (A) Total units to be sold in Year 1 (B) Plus: Desired FG Ending Inventory (C) 35 60 70 Less: FG Beginning Inventory (D) No.00 2.900. The business assumption of this allotment is the availability of stocks to be ready for the possible increase in demands especially during months with special events.720.250.050.00 2.Technical Plan ETNIKO MERCHANDISE Product (A) Total units to be sold in Year 1 (B) Plus: Desired FG Ending Inventory (C) Less: FG Beginning Inventory (D) No.100.00 2.00 Etniko started to have a business rule of allotting 10% for the desired finished goods ending inventory and gradually lowers every year as the managing entrepreneurs get to know the trend of customer’s demand.00 11.000. of Units to be Produced (E ) Productio n Cost per Unit (F) Total Cost of FG Ending Inventory (G) Bags and Laptop/ Netbook cases Pouches and Coin Purses Eyeglass and Pen holders Total for Year 5 577 993 1. 61 .166 34 58 68 578 995 1168 150 50 40 5.800.720.

5 62 .Technical Plan ETNIKO MERCHANDISE Table 2: Direct Raw Materials Requirement Direct Raw Materials Requirement PRODUCT:Bags and Laptop/ Netbook cases Direct Material (A) Purchase cost per unit of material (B) Quantity needed per unit to be produced (C) Cost per unit to be produced (D) talahib dye gawgaw (starch) 0 5 per pack P 20/ 20 g 10/ piece P 30/ 350 ml P 5 per pack 1/4 kg 2 packs 10 g 1 piece 87.5 5 talahib dye gawgaw(starch) 0 5 per pack P 20/ 20 g 10/ piece P 30/ 350 ml P 5 per pack zipper varnish glitters Direct Material Cost per unit 29.5 15 52.5 zipper varnish glitters PRODUCT: Pouches and Coin Purses Direct Material (A) Purchase cost per unit of material (B) Quantity needed per unit to be produced (C) 1/4 kg 1 pack 5g 1 piece 50 ml 1 pack Cost per unit to be produced (D) 0 5 5 10 4. 5 ml 3 packs (assorted color) Direct Material Cost per unit 0 10 10 10 7.

Table 3: Direct Materials Cost Direct Raw Material Cost for a Multiple Product Line Business Product Line (A) Direct Raw Material Cost per Unit to be produced (B) No.50 49.50 19.641. P 29.50 29. and eyeglass and pen holders are P 52.Technical Plan ETNIKO MERCHANDISE PRODUCT:Eyeglass and Pen holders Direct Material (A) Purchase cost per unit of material (B) Quantity needed per unit to be produced (C) Cost per unit to be produced (D) talahib dye gawgaw(starch) varnish glitters 0 5 per pack P 20/ 20 g P 30/ 350 ml P 5 per pack 1/4 kg 1 pack 5g 50 ml 1 pack Direct Material Cost per unit 0 5 5 4.270.50 63 .5.708. pouches and coin purses.50 348 598 703 18.00 13.5 The direct material cost per unit of bags and laptop cases.00 17. of units to be produced (C) Direct raw material cost per product line (D) Bags and Laptop/ Netbook cases Pouches and Coin Purses Eyeglass and Pen holders Total direct material cost (for Year 1) 52.5 5 19.619.5 and P 19.5 respectively.

00 68.50 29.692.477.110.396.371.993.526. of units to be produced (C) Direct raw material cost per product line (D) Bags and Laptop/ Netbook cases 52.00 21.269.50 29.50 59.50 18.50 16.50 19.694.50 364 628 737 19.Technical Plan ETNIKO MERCHANDISE Direct Raw Material Cost per Unit to be produced (B) No.945.50 418 721 845 21. of units to be produced (C) Direct raw material cost per product line (D) Bags and Laptop/ Netbook cases 52.50 482 827 974 25.007.50 19.305.00 14.00 Pouches and Coin Purses Eyeglass and Pen holders Total direct material cost (for Year 3) Product Line (A) Direct Raw Material Cost per Unit to be produced (B) No.50 19.50 Pouches and Coin Purses Eyeglass and Pen holders Total direct material cost (for Year 4) 64 .50 52.50 29.50 Pouches and Coin Purses Eyeglass and Pen holders Total direct material cost (for Year 2) Product Line (A) Direct Raw Material Cost per Unit to be produced (B) No. of units to be produced (C) Direct raw material cost per product line (D) Product Line (A) Bags and Laptop/ Netbook cases 52.00 24.00 18.

) Total 10 20 20 60 10 12 12 12 100.00 65 .50 19.00 29.00 1.50 Table 4: Indirect Raw Materials Requirement Indirect Raw Ending Inventory Schedule (Year 1) Indirect Materials Purchase Cost per unit Quantity to be kept in stock Cost of material per stock Threads plastic cover bleach (per liter) baking soda (230 g.776. of units to be produced (C) Direct raw material cost per product line (D) Product Line (A) Bags and Laptop/ Netbook cases Pouches and Coin Purses Eyeglass and Pen holders Total direct material cost (for Year 5) 52.00 240.00 720.00 264.00 792.) Total 11 22 22 66 10 12 12 12 110.Technical Plan ETNIKO MERCHANDISE Direct Raw Material Cost per Unit to be produced (B) No.50 578 995 1168 30.430.00 82.345.00 Indirect Raw Ending Inventory Schedule (Year 2) Indirect Materials Purchase Cost per unit Quantity to be kept in stock Cost of material per stock Threads plastic cover bleach (per liter) baking soda (230 g.00 1.300.00 240.50 29.473.352.00 264.50 22.

28 87.64 29.62 26.40 871.44 958.38 1054.33 66 .30 Indirect Raw Ending Inventory Schedule(Year 5) Indirect Materials Purchase Cost per unit Quantity to be kept in stock Cost of material per stock Threads plastic cover bleach (per liter) baking soda (230 g.) Total 12.84 10 12 12 12 146.1 24.00 290.15 1903.40 290.10 319.) Total 14.28 29.Technical Plan ETNIKO MERCHANDISE Indirect Raw Ending Inventory Schedule (Year 3) Indirect Materials Purchase Cost per unit Quantity to be kept in stock Cost of material per stock Threads plastic cover bleach (per liter) baking soda (230 g.32 1.730.20 72.41 351.60 10 12 12 12 121.20 24.00 Indirect Raw Ending Inventory Schedule (Year 4) Indirect Materials Purchase Cost per unit Quantity to be kept in stock Cost of material per stock Threads plastic cover bleach (per liter) baking soda (230 g.62 79.86 10 12 12 12 133.) Total 13.573.38 351.31 26.20 1.44 319.

the company is practicing conservatism to be able to forecast the cost per unit of production that would determine the price to be set by the company. Table 5: Indirect Material Requirements Indirect Material Requirements (Year 1) Direct Material Purchase cost per unit of Direct Material 10 20 20 60 Quantity needed per year 3 12 12 12 Cost of Material in stock 30 240 240 720 1. Though it may seem unlikely that a consistent increase of price would happen. The company would expect a 10% increase of the prices each year. the cost of raw materials (indirect) for a year’s production lies between P1300-P2000.230 Threads plastic cover bleach (per liter) baking Soda (230 g.353 67 .) Total (Year 1) Indirect Material Requirements (Year 2) Direct Material Purchase cost per unit of Direct Material Quantity needed per year Cost of Material in stock Threads plastic cover bleach (per liter) baking soda (230 g.) Total (Year 2) 11 22 22 66 3 12 12 12 33 264 264 792 1.Technical Plan ETNIKO MERCHANDISE As the table 4 portrays. further giving us an ample space to be flexible in pricing our products as one of our competitive edge.

the company plans to buy in quantities that would last for about a year of production.) 87.) Total (Year 3) 12.2 72.30 290.6 3 12 12 12 36.637.846 12 Total (Year 5) Cost of Material in stock 43. Buying in bulk would give the company an advantage upon inflation and other events that would tend to increase the prices of such commodities.32 1.641 3 plastic cover 29.384 1054.2 24.282 12 baking soda (230 g.1 24.923 351.93 319.488.44 319.20 1.Technical Plan ETNIKO MERCHANDISE Indirect Material Requirements (Year 3) Direct Material Purchase cost per unit of Direct Material Quantity needed per year Cost of Material in stock Threads plastic cover bleach (per liter) baking soda (230 g.44 958.31 26.30 Indirect Material Requirements (Year 4) Direct Material Purchase cost per unit of Direct Material 13.843 Since the products of Etniko are more inclined with the direct materials than indirect.62 26.) Total (Year 4) Indirect Material Requirements (Year 5) Direct Material Purchase cost per unit Quantity of Direct Material needed per year Threads 14. 68 . It would serve as a strategic edge of the company with regards to pricing the products.40 290.86 Quantity needed per year 3 12 12 12 Cost of Material in stock 39.62 79.152 1800.384 351.13 Threads plastic cover bleach (per liter) baking soda (230 g.40 871.282 12 bleach (per liter) 29.

Table 7: Indirect Materials Purchases Year 1 1.00 1.488.530.00 1.84 The company projects a ten percent (10%) increase per year.573.794.84 1.13 Year 6 1.30 1.488.00 1.631.483.00 Year 2 1.730.13 1.800.00 Year 3 1.00 1.30 Year 5 1.637.730.00 2.00 1.903.00 Year 3 1.230.973.30 1.637.43 Year 5 1.00 1.30 1.30 Year 4 1. This is a company policy when it comes to projecting prices as a practice of conservatism.87 Total Indirect Materials Cost Add: Desired Indirect Materials Ending Invty Less: Indirect Materials Beginning Invty TOTAL INDIRECT MATERIALS PURCHASES Graph for Table 7: Indirect Materials Purchases Indirect Materials Purchases 3000 2500 Peso Amount 2000 1500 1000 500 Total Indirect Materials Cost Add: Desired Indirect Materials Ending Inventory Less: Indirect Materials Beginning Inventory Total Indirect Materials Purchases 0 Year 1 Year 2 Year 3 Year 4 Year 5 69 .300.00 1.33 1.300.00 Year 2 1353.430.800.573.353.430.Technical Plan ETNIKO MERCHANDISE Table 6: Indirect Materials Cost Year 1 Indirect Material Cost 1230. Price increase would attributable to inflation and other events that would compromise the price of a certain products not within the control of the company.

and Molders Sewers INDIRECT LABOR Embellishers SALES STAFF ADMINISTRATIVE STAFF 1 1 1 2 Salary/Month 0 0 0 1500 Annual Salary 0 0 0 19500 19500 0 0 1500 0 1 3 0 0 500 0 70 . the company had the largest amount of purchases. and Strainers Refiners. It had not yet perfected the process that would require minimum materials yet would yield the maximum numbers of products. During the first year of operation. This is so because the company is still starting the business. An allowance for production of defective products is also taken into account.Technical Plan ETNIKO MERCHANDISE Table seven shows the indirect materials purchases for five years of Etniko. of Employees DIRECT LABOR Cutters and Boilers Drainers. Table 8: Manpower Requirements No. An increase over the years indicates the increase in the volume of production to satiate the growing demands of the customers.

71 . and Strainers 11% 11% 11% 22% 34% Refiners. the direct labor has no salary. It is due to the fact that the partners would be hands-on on the production of the products to ensure its quality. and Molders Sewers Embellishers SALES STAFF ADMINISTRATIVE STAFF As indicated in the table. This is also assurance that the products are made as the owners visualized.Technical Plan ETNIKO MERCHANDISE Graph of Table 8: Manpower Requirements Number of Employees 0% 11% Cutters and Boilers Drainers.

72 .007.8625 94.22 74.50 77.50 19500 0 1230 600 0 1500 1200 900 74.157. The increase in the total production is in line with the business’ strategy of expanding as moves into stability.50 19500 0 1637.15 1041.619.3 661.50 19500 0 1353 630 0 1500 1260 945 77.157.694.00 19500 0 1488.556.30375 0 1500 1458.457.549.556.692.457.843 729.21 Direct materials Direct Labor Production Overhead Indirect Labor Indirect materials Repair and Maintenance Depreciation Transportation Expense Light and Power Water Total Cost of Production Graph of Table 9: Cost of Production Total Cost of Production Year 1 Year 2 Year 3 Year 4 Year 5 108.5 0 1500 1323 992.50 Year 3 59.195.05 Year 4 68.50 85.05 Total Cost of Production The total cost of production is increasing due to the increase in the units to be produced.22 Year 5 82.Technical Plan ETNIKO MERCHANDISE Table 9: Cost of Production Year 1 49.473.549.50 19500 0 1800.195.25 85.13 694.575 0 1500 1389.50 Year 2 52.6075 1093.21 94.9556 108.

70 49.98 396.000.000.33 65.30 51.700.815.216.00 44.674.00 10.12 656.00 11.00 Total Cost of Production Year 1 Year 2 Year 3 Year 4 Year 5 As the direct material and indirect material expectedly increases in each year.094. Light and power is also expected increase as more demands must be fulfilled by the business.771.81 Graph of Table 10 70.00 11.30 20.317.50 35.35 625.58 900 900 900 900 900 720 756 793.000.00 51.00 11.59 437. 73 .28 416.00 40.75 0 1260.8 378 0 892.00 11.700.700.700. more energy is allotted to production.000.70 56.9 0 982.23 50.317.81 46.094.204.700.10 11.00 0 738 360 0 811.23 56.70 46.00 30.00 60.33 65.000.Technical Plan ETNIKO MERCHANDISE Table 10: Total Cost of Production for Product Line#1 : Bags and Laptop/Netbook cases Bags and Laptop/ Netbook cases Direct materials Direct Labor Production Overhead Indirect Labor Indirect materials Repair and Maintenance Depreciation Transportation Expense Light and Power Water Total Cost of Production Year 1 Year 2 Year 3 Year 4 Year 5 29.00 0.000. so thus the total cost of production.313.49 875.674.000.37 44.729.484.70 31.20 41.16 540 567 595.8 833.729.313.

364.65 25.25 17.9 416.602.45 208.850.14 540.Technical Plan ETNIKO MERCHANDISE Table 11: Total Cost of Production for Product Line# 2: Pouches and Coin Purses Pouches and Coin Purses Year 1 Year 2 Year 3 Year 4 Year 5 14. more energy is allotted to production.907. The gradual increase in the cost of 74 .364.742.337.17 22.566.00 5.850.35 24.00 5. As the direct material and indirect material expectedly increases in each year.850.12 Total Cost of Production The same also holds true for pouches and coin purses.86 Graph of Table 11 Total Cost of Production Year 1 Year 2 Year 3 Year 4 28.566.850.158.00 Direct materials Direct Labor Production Overhead Indirect Labor 0 0 0 0 0 Indirect materials 369 405.12 28.85 23.547.37 218.86 23.68 312.56 328.75 437.85 15.00 5.65 25.00 5.547.05 5.58 Water 270 283.60 20.9 446.25 Repair and Maintenance 180 189 198.608.17 32.19 Total Cost of Production 22.850.79 Depreciation Transportation Expense 450 450 450 450 450 Light and Power 360 378 396.337.158.85 Year 5 32. so thus the total cost of production.5 297.885.49 491. Light and power is also expected increase as more demands must be fulfilled by the business.

45 208.90 15.79 Total Cost of Production 14. Table 12: Total Cost of Production for Product Line# 3: Eyeglass and Pen holders Eyeglass and Pen holders Year 1 Year 2 Year 3 Year 4 Year 5 9.40 13.72 Water 180 189 198.92 145.900. the expected increase on its cost of production will nevertheless still suggest that sufficient supply is produced to the demand of the market on eyeglass and penholders.86 Depreciation Transportation Expense 300 300 300 300 300 Light and Power 240 252 264.37 218.24 14.909.41 18.6 277.44 Total Cost of Production Though eyeglass and pen holders have the lowest cost of production among the three product lines.00 3.41 18.711.891.494. Pouches and coin purses never go out of style.738.10 17.44 21.439.900.6 297.70 3.24 Graph of Table 12 Total Cost of Production Year 1 Year 2 Year 3 Year 4 Year 5 21.031.900.10 17.00 Direct materials Direct Labor Production Overhead Indirect Labor 0 0 0 0 0 Indirect materials 246 270.90 16.00 3.43 360. 75 .031.90 10.90 15.900.Technical Plan ETNIKO MERCHANDISE production in each year also indicates that pouches and coin purses have the most potential to be sold.909.3 138.00 3.00 3.50 11.938.891.401.17 Repair and Maintenance 120 126 132.900.66 327.439.923.83 291.711.

891.17 Units to be produced 598 628 721 827 Product cost per unit 37.031.24 1168 18.12 28337.39941 36.2453 122.94858 20.90 15.5336 127.85 23158.3 51094.41 18. Cost per Unit 140 120 100 80 60 40 Year 1 Year 2 Year 3 Year 4 Year 5 Bags and Laptop/ Netbook cases Pouches and Coin Purses Eyeglass and Pen holders 20 0 Since the cost of production is a variable cost.5816 Pouches and Coin Purses Year 1 Year 2 Year 3 Year 4 Total Cost of Production 22364. the cost per unit tends to decline.39573 Year 5 65313.81 578 112.15551 19.235 117.73052 Year 5 21.87683 35.26501 Eyeglass and Pen holders Year 1 Year 2 Year 3 Year 4 Total Cost of Production 14.65 25547.Technical Plan ETNIKO MERCHANDISE Table 13: Cost per Unit Bags and Laptop/ Netbook cases Year 1 Year 2 Year 3 Year 4 Total Cost of Production44729.909.9997 Year 5 32566.711.20896 20.33 Units to be produced 348 364 418 482 Product cost per unit 128.10 17. the unit cost is supposedly unchanging.44 Units to be produced 703 737 845 974 Product cost per unit 21. 76 . since the total increase in the units to be produced is larger than the increase in the cost of production.43289 34.439. The decline in units cost is advantageous on the cost pricing strategy of the business. However.58839 Graph for Table 13.23 56674.7 46317.86 995 32.

The difference in product cost per unit is justified by the corresponding computations of cost of production from the previous table. 77 . Also.94 25.74 Bags and Laptop/Netbook Pouches and Coin Purses Cases Eyeglass and Pen Holders Due to higher direct labor cost.04 41.Technical Plan ETNIKO MERCHANDISE Table 14: Production Cost per Unit Graph for Table 14: Production Cost per Unit PRODUCTION COST PER UNIT 88. the product cost per unit for bags and laptop/netbook cases are relatively higher than pouches and coin purses and eyeglass and pen holders. the pouches and coin purses product cost per unit is relatively higher than eyeglass and en holders.

52 Eyeglass and Pen Holders 25.32 Total finished goods ending inventory (Year 4) 7176.04 34 2993.04 33 2905.4 Eyeglass and Pen Holders 25.8 Finished Goods Inventory for Etniko Merchandise (Year 3) Product Cost Desired ENDING Product Line per Unit Finished Goods Inventory FINISHED GOODS INVENTORY Bags and Laptop/Netbook Cases 88.74 64 1647.76 Eyeglass and Pen Holders 25.32 Pouches and Coin Purses 41.52 Eyeglass and Pen Holders 25.94 54 2264. Finished Goods Inventory Finished Goods Inventory for Etniko Merchandise (Year 1) Product Cost Desired ENDING Product Line per Unit Finished Goods Inventory FINISHED GOODS INVENTORY Bags and Laptop/Netbook Cases 88.36 Total finished goods ending inventory (Year 1) 6729.2 Finished Goods Inventory for Etniko Merchandise (Year 5) Product Cost Desired ENDING Product Line per Unit Finished Goods Inventory FINISHED GOODS INVENTORY Bags and Laptop/Netbook Cases 88.94 58 2432.Technical Plan ETNIKO MERCHANDISE Table 15.32 Pouches and Coin Purses 41.8 Total finished goods ending inventory (Year 5) 7399.94 60 2516.4 Finished Goods Inventory for Etniko Merchandise (Year 2) Product Cost Desired ENDING Product Line per Unit Finished Goods Inventory FINISHED GOODS INVENTORY Bags and Laptop/Netbook Cases 88.94 58 2432.04 33 2905.74 70 1801.94 56 2348.84 Total finished goods ending inventory (Year 2) 6952.84 Total finished goods ending inventory (Year 3) 7036.04 35 3081.68 Finished Goods Inventory for Etniko Merchandise (Year 4) Product Cost Desired ENDING Product Line per Unit Finished Goods Inventory FINISHED GOODS INVENTORY Bags and Laptop/Netbook Cases 88.6 78 .64 Eyeglass and Pen Holders 25.74 68 1750.28 Pouches and Coin Purses 41.74 66 1698.74 66 1698.4 Pouches and Coin Purses 41.04 32 2817.36 Pouches and Coin Purses 41.

80 7.70 Year 5 108556. the cost of goods sold will match up the finished goods inventory.729.924.109. 79 .176.00 40.90 7.68 7176.21 7.00 TOTAL COST OF GOODS SOLD In effect.317.176. beginning inventory 6. ending inventory 6.50 85. Cost of Goods Sold Cost of Goods Sold for Etniko Merchandise Year 1 Year 2 Year 3 Total cost of production 74. Etniko will need to maintain higher finished goods inventory each year.399.20 94.20 115.68 101.000.549.493.10 76.036.000.Technical Plan ETNIKO MERCHANDISE Graph for Table 15.729.05 Add: F.68 TOTAL COST OF GOODS SOLD 67.6 Year 1 Year 2 Year 3 Year 4 Year 5 As the business becomes stable and the demand for the talahib product increases.952.00 60.60 108.332.000.195.40 6.952.10 85.000.972. G.157.732.073.80 Total cost of goods available for sale 74. Table 16.2 7399. Finished Goods Inventory Finished Goods Inventory 6729.17 Year 4 94457.40 6.549.036.00120.8 7036.000.90 92.820.50 83. G.000.00 80.50 77.4 6952.00 100.22 7.81 Graph of Table 16 Total Cost of Goods Sold 3 1 20.41 7.85 Less: F.

50 28.982.00 617.00 45.650.00 84.10 47.00 54.00 96.00 598. 4 Plus: Desired Ending Inventory Less: Beginning Inventory No.00 639.00 1.927.60 Year 4 (5.41%) Product Total Units to be sold in Yr.4%) Product Total Units to be sold in Yr.166.031.00 32.00 43.204.00 55.30 19.60 25.00 827.90 80 .00 36. of Units to be Purchased Purchase Cost per Unit Total Cost of Merchandise Purchases Bags and Laptop/Netbook Cases Pouches and Coin Purchases Eyeglass abd Penholders Total 363.00 2.320.574.00 Year 3 (6.316.50 34.40 20.00 58.00 127. of Units to be Purchased Purchase Cost per Unit Total Cost of Merchandise Purchases Bags and Laptop/Netbook Cases Pouches and Coin Purchases Eyeglass abd Penholders Total 418.00 845.00 67.00 34.20 57.00 151.253.017.00 493.00 34.00 993.00 981.698.20 90.40 105.00 835.90 21.90 20.00 1.00 1.00 712.00 39.15%) Product Total Units to be Sold in Yr.40 21.00 393.00 117.00 626.00 35.20 35.00 43.736.00 22.20 67.00 48.00 685.00 54. of Units to be Purchased Purchase Cost per Unit Total Cost of Merchandise Purchases Bags and Laptop/Netbook Cases Pouches and Coin Purchases Eyeglass abd Penholders Total 481.00 2.00 719.309. 2 Plus: Desired Ending Inventory Less: Beginning Inventory No.585.545.15 177.087.00 42.00 33.00 51.00 Year 2 (7.4%) Product Total Units to be sold in Yr.00 51.00 22.00 972.00 2.00 1.00 1.00 151.00 46.00 125.767.756.20 187.522.953.599.00 125.Technical Plan ETNIKO MERCHANDISE Table 17: Total Merchandise Cost Year 1 (9.36%) Product Total Units to be sold in Yr.00 14.00 595.00 39.00 22.70 18.00 725.024.00 1.40 171.50 37.00 180.203.90 185. of Units to be Purchased Purchase Cost per Unit Total Cost of Merchandise Purchases Bags and Laptop/Netbook Cases Pouches and Coin Purchases Eyeglass abd Penholders Total 577.152.00 125.30 15.50 83.255.00 125.499.20 36.00 35.640.00 36.00 122.00 113.00 128.00 1. 1 Plus: Desired Ending Inventory Less: Beginning Inventory No.00 47.40 Year 5 (6.00 1.00 - 370.00 2. 3 Plus: Desired Ending Inventory Less: Beginning Inventory No.00 46.00 735.280.00 122.00 42.75 48.20 22.00 356.00 47. of Units to be Produced Purchase Cost per Unit Total Cost of Merchandise Purchases Bags and Laptop/Netbook Cases Pouches and Coin Purchases Eyeglass abd Penholders Total 316.00 1.00 544.50 164. 5 Plus: Desired Ending Inventory Less: Beginning Inventory No.283.50 19.176.724.791.00 848.00 48.00 96.80 17.

00 83.Technical Plan ETNIKO MERCHANDISE Cost of Goods Sold Total Sales Less: Average Mark-up (30%) Total Cost of Goods Sold Year 1 100.915.55 82.902.00 30.00 38.797.902.00 122.599.789.91 Merchandise Inventory Merchandise Inventory.46 Year 5 125.00 105.331.00 18.268.90 119.55 Year 2 151.00 82.24 93.462.76 -3231.76 Year 4 152.09 119.672.00 48.184.00 90.004.428.160.591.40 103.05 Year 3 132.99 81 .591.155.205.004.00 63.45 Year 2 115.16 Year 4 96.94 Year 5 182.203.672.60 93.05 Year 3 125.45 2315. Ending Year 1 84.320.00 84.915.06 103.585.95 84.91 3118.05 -1561.94 1792. Beginning Add: Merchandise Purchases Less: Cost of Goods Sold Merchandise Inventory.316.