Reference no: EM13386821

Choose an item that you would like to manufacture. You do not actually need to manufacture something, but will proceed through the assignment as if you were planning on manufacturing the item you have selected. The product should require materials and labor and be something that you are familiar with in process from start to finish. The product must be useful and marketable. You can choose something as simple as making chocolate chip cookies, a type of craft, or something more complicated. Consider production as if you were making the product from beginning to end, and not as if using a kit.

Perform the following steps:

Choose a product to manufacture and to describe the manufacturing process.

Prepare the following budgets for 1 quarter broken down monthly regarding your chosen item: estimated sales budget, estimated direct materials budget, estimated direct labors budget, estimated manufacturing overhead budget, estimated selling and administrative expenses and an estimated income statement.

Classify all manufacturing costs and selling and administrative expenses as either variable or fixed.

Prepare a contribution margin income statement separating all variable and fixed costs into their own categories.
Determine the breakeven point in units and dollars. Also, determine the number of units and dollars that need to be sold to make a target profit of $5,000 a month.
Identify what types of trends you should be aware of in the industry and who the primary competitors are.
Answer the following question: If you had to improve the bot***** *****ne, what would you do and what concerns would you have going forward.
Choose a piece of equipment that you might consider purchasing to increase production of your item and address the following questions: What types of capital budgeting factors would you look at when deciding whether to do this? What would be the relevant costs that you would consider in this decision?
Your final project should be in the form of a paper using Microsoft Word that addresses each of these different areas. Steps #1, 6, 7 and 8 will be in paragraph form and Steps #2, 3, 4 and 5 will involve numerical calculations that should be put into the form of a table in proper format and included as part of the paper. You should show any calculations in either a table within Word or you can copy and paste your calculations directly from Microsoft Excel into Microsoft Word.

1. I will be manufacturing toy boats. The process I will be using to manufacture toy boats is certain steps which raw materials are transformed into a final product of the toy boat. Through the process of manufacturing toy boats a mold will be created first to use to make the boat. After the mold is complete another material will be poured into the mold to begin the molding step. When the material poured into the mold is dry it will then be removed and combined with other molded parts to form a toy boat model. Machinery to create the molds and the boat parts are necessary when each part is finished being made. At this point they will be collected up, packaged, and sent out.

When developing toy boats one must recognized of how the industry is and your competitors. Younger children love toy boats, but one must be aware of who their competitors are and what other features are being added to other toy boats to further sales. It could be anything from boats that transform or light up or is battery operated and the customer can control it with a remote

To improve the bot***** *****ne I would save costs by using different materials used to make the boats. Another way I could cut costs is used a different material packaging the product. The only concern is having a durable product.

8. A Piece of equipment I would purchase to increase production would be an automatic injection molding machine. The capital budgeting factors is if this machine will create more money than what has been put into it and if it will make profit in the long run. The cost of