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Republic of the Philippines Polytechnic University of the Philippines College of Economics, Finance and Politics Department of Banking and

Finance

A COMPREHENSIVE FEASIBILTY STUDY FOR THE ESTABLISHMENT OF JAKRIMACENT COSMETIC CORPORATION

Submitted by:

Agustin, Krizelle R. Alvarez, Vincent O. Chavez, Janina U. Maniago, Mayce P.

Date of Submission:

February 29, 2012

CONCEPT:
The JAKRIMACENT Cosmetic Corporation is intended to manufacture cosmetic products which are made from natural ingredients. This is to promote the use of natural products which are good and helpful to our body. Planned to establish as a corporation-type entity, the company will carry the name JAKRIMACENT Cosmetic Corporation when it applies for the business status. The proponent chose corporation as the type of organization because the manufacturing process will require a big amount of budget. In order to weigh the expenses, the capital must be significantly higher for the new establish firm.

OBJECTIVE:
As stated in the concept for its creation, JAKRIMACENT Cosmetic Corporation will promote the use of natural cosmetic products. JAKRIMACENT Cosmetic Corporation wants to encourage buyers to use products which is not only concern in enhancing ones beauty and whiteness but in maintaining a sound and healthy body. The corporation assures that the personal assets of Shareholders are not at risk for satisfying debts or liabilities. The corporation aims to full costumers satisfaction when it comes to beauty products.

ORGANIZATION STAFF:
The JAKRIMACENT Cosmetic Corporation is ultimately headed by the Company President. He will report to the chief executive officer and board directors of a corporation or a business. The President will ensure that all lines of business within an organization are running efficiently. The President should preferably have a wide of strategic experience and the ability to execute plans efficiently and within the budget. The President will be assisted by the Secretary who will be in charge to do the minutes of the company meeting and to attend meetings or behalf of the President. The Secretary should perform the task as a petty cash custodian. The corporation will have Department Managers: Administration and Finance Manager and Manufacturing Manager. The main function of the Administration and finance Manager is to provide financial expertise in determining key drivers of operations through consistent monitory of performance analysis, identifying and interpreting variances and tends. The marketing Manager achieves the sales target for the year, ensures proper maintenance of all existing accounts with ones area. The Manufacturing Manager established strategic systems and key internal control measures to ensure availability of materials, to support production plans, product development and other sources of demand. The corporations also have the Quality Control Supervisor that will assure the overall control system program. He is responsible to conduct final product testing and to secure the safety of the

finished product. While the employees as the production operators are responsible for the best production operation and must adhere the manufacturing system and daily operation. The entity needs to have the Accounting Staff that will accomplish the general accounting tasks. He is responsible in preparing the monthly, quarterly, semiannually and annually financial reports. Human Resource staff performs the processing of Recruitment such as applicants screening, posting ads, and participation on job fairs, initial interview and new hiring process. Lastly, the Sale staff is the one to prepare and monitor sales reports and related matters. He also must practice good customer service.

ACTUAL PLAN:
Initially, the corporation will have its main office in Sta. Mesa, Manila near SM Centerpoint. The products will be distributed in all selected outlets and stores. There will be meetings for all the distributors during Mondays and Saturdays.

FUTURE PLANS:
After two years of operation, JAKRIMACENT Cosmetic corporation will launch its upgrated natural products. The Corporation will also expand its office by having branches in different places of Manila and some provinces.

FACILITIES
As a manufacturing company, JAKRIMACENT Cosmetic Corporation may be required to have the following facilities: 1. 2. 3. 4. 5. Company building and laboratories Office for the resident Office for the Managers and Staffs An air-conditioned conference room Machines and other equipment for product manufacturing

INVESTMENT:
Approximately, JAKRIMACENT Cosmetic Corporation entails an initial investment of about Php 2, 000,000. Thus, amount can be broken as follows:

Material Cost Labor Cost Factory Overhead Total Manufacturing Cost Total Cost

Php

500,000 700,000 200,000 600,000 2,000,000

PROFITABILITY ANALYSIS:
The simplest way of approximating profitability is to assume the expected cost of one bottle of cosmetic product and subtract from it the expected expenses. For instance, a one bottle of cosmetic product amounts to Php100 and there is 1000 bottles ready for sale in a month. Pho 100 X 1000 X 1 month = Php 1,000, 000 Php 100 X 1000 X 12 months = Php 1,200,000 (Per Year) Assuming an overhead payment of approximately 30% of gross. Will yield, Php 1, 200, 000 - 360, 000 840, 000

Or approximately Php 840, 000/ 12 months = Php 70, 000

The approximate minimal net income per month is Php 70, 000. This means that if the number of supply per month will increase, it is expected to have higher profit. If at the end of the year, the corporation will be dissolved, the shareholders right will command a million pesos.

OPERATIONAL EXPENSES:
Of the expected Php 1, 200,000 gross, approximately Php 420, 000 will be itemized as maximal operational expenses. This means that staff costs, electrical costs and other expenses should not be exceed this amount.

BREAK- EVEN POINT ANALYSIS:


JAKRIMACENT Cosmetic Corporation s investment of Php 2, 000, 000 is recoverable within 28 to 30 months if the computation will be based on a minimal expectation of approximately Php 70, 000 per month net profit. Should the numbers of cosmetic filled bottles available for sale increase every month, recovery will come in just few months.

SALARY RATE TABLE:


The proposed salary rate table is as follows: Position title President Executive secretary Marketing manager Manufacturing manager Administration and Finance manager QC supervisor Sales staff Export staff HR staff Accounting staff Workers TOTAL No. of person 1 1 1 1 Rate (in Php) 100, 000 20, 000 40, 000 40, 000 Salary (in Php) 100, 000 20, 000 40, 000 40, 000

1 1 5 5 3 4 24 47

50, 000 25, 000 9, 000 9, 000 9, 000 12, 000 8, 000

50, 000 25, 000 45, 000 45, 000 27, 000 48, 000 192, 000 602, 000

The 13 month is provided according to labor law of the Philippines. The company also provides the following mandatory employee benefits to each of the members of the organization. All department managers work 6 days a week, however, except Manufacturing Manager and accountant will have to work on Sunday or holiday if necessary. Employees have to work on Sunday if ever there will be a rush order from clients.