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Estimate the costs that the company will incur in its first month and year of operations

Introduction Describe a product that you will like to manufacture. Provide an overview about the proposed business including its competitors, the industry in which it will operate and target customers. Read and summarize a recent article about the industry or economic conditions in the country or economic forecasts. Discuss how the subject matter of the article may affect the business with respect to making the product Costs


1. What will you need to make the product? Will the production be labor intensive or capital intensive? What strategy will you adopt – being a low-cost producer, product differentiation or others?


2. Describe and estimate the costs that the company will incur in its first month and year of operations


3. Classify the costs as either product costs or period costs. For product costs, state whether the cost is a direct materials cost, direct labor cost or manufacturing overhead. Further breakdown the period costs into selling cost and administrative cost. Also, indicate whether the cost is a fixed cost, variable cost or a mixed cost .


4. Estimate the costs of making one unit of the product Price


5. Determine and justify the price that you will charge for your product . Other questions


6. Calculate: (i) The break-even sales in units (ii) The break-even sales in dollars (iii) The sales in units that would be required to produce a desired operating income of $500,000

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