Reference no: EM133450554
ABC" Manufacturing, Inc. creates the prototypes and molds that production manufacturers utilize to create consumer goods. A unique piece of design software called Virtual Design Center was created and patented by our start-up firm. The first step in our objective is to establish a precision manufacturing plant to build prototypes and molds for customers. Our mission is to offer our clients a quick turnaround, outstanding quality, unmatched customer service, and affordable prices. Molds and prototypes are created by us. Through the use of the VDC, we will collaborate in real-time with our clients to fulfill their design requirements, reducing mistakes and spotting design defects early in the process. The consumer will subsequently save time and money as a result. In contrast to our rivals, who operate identical mold production plants, we intend to portray ourselves as a progressive business that consistently makes investments in innovative concepts and technology. We will be able to compete on pricing and quality because of our exclusive software, cutting-edge technology, and effective procedures. This manufacturing business plan will explain how we have a distinct edge because of our exclusive VDC. We will build a high-tech, precise production plant and put in place extremely effective operational procedures to fulfill our company goals. We have a vigorous, focused marketing effort in mind to popularize "ABC" Manufacturing and our exclusive Virtual Design Software. A publicity campaign, print and internet advertising, and a focused direct-mail effort will all be a part of this. We will also put a lot of effort into developing our presence at pertinent trade exhibitions.
Cost-Volume-Profit Analysis
1. For each cost number, check whether it is a fixed or variable cost. Explain your choice.
2. Calculate the break-even point in units and in euros. For the calculation, suppose that you produce and sell only one product.1
3. Set a target profit that the business should achieve in Year 1. Calculate the sales volume needed, in units and in euros, to achieve the target profit.
4. Consider an advertising campaign that would increase your sales by 10%. By how much would the operating income shown in (3) increase or decrease if the campaign is realized?
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