Introduction
Woolen knitted products are highly demanded. The business idea is aimed at establishing a woolen kitting project with a capital investment cost of US$ 18,834 , producing an average of 60 woolen knitwear products per day totaling to US$ 18,720 pieces fetching a revenue of US$ 121,680 when sold in the first year of operation. The operating costs are US$ 104,342.
Production Capacity, Technology & Process
The production process involves winding yarn and then knitted in different fashions as the operator desires. The product is combined together by a sewing machine and then packed.
The production capacity largely depends on the nature of the machines used, the efficiency and experience of the workers, and the desired objectives of the project.
Capital Requirements and Equipment
Capital Investment Requirements in US $
| Capital investment item | units | Qty | @ | Total |
|---|---|---|---|---|
| Knitting machine | No | 2 | 7,000 | 14,000 |
| Sewing machine | No | 2 | 500 | 1,000 |
| Furniture | No | – | – | 2,500 |
| Scissors | No | 10 | 15 | 150 |
| Measuring tapes | No | 12 | 7 | 84 |
| Steam Iron | No | 2 | 50 | 100 |
| Other Equipment | No | – | – | 1,000 |
| Total | 18,834 |
Production and Operating Costs in US$ Direct Materials, Supplies and Costs
| Cost Item | Units | @ | Qty/ day | Pdn cost/ day | Pdn cost/ mth | Pdn cost/ yr |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Rolls of yarn | Rolls | 0.75 | 254 | 190.5 | 4,953 | 59,436 |
| Rolls of threads | Rolls | 0.5 | 35 | 17.5 | 455 | 5,460 |
| Packaging materials | Pcs | 0.08 | 64 | 5.12 | 133 | 1,597 |
| Sub-total | 353 | 213.1 | 5,541 | 66,493 |
General Costs(Overheads)
| Labor | 954 | 11,450 |
|---|---|---|
| Utilities | 346 | 4,150 |
| Selling and distribution | 187 | 2,240 |
| Miscellaneous expenses | 88 | 1,050 |
| Administration expenses | 188 | 2,250 |
| Rent | 1,000 | 12,000 |
| Depreciation | 2763 | 4,709 |
| Sub-total | 3,143 | 37,849 |
| Total Operating Costs | 8,684 | 104,342 |
- Production costs assumed are for 312 days per year with daily capacity of knitting 60 pieces of woolen knitwear.
- Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
- Direct costs include: materials, supplies and other costs that directly go into production of the product.
- Total monthly days assumed are 26-work days.
- The valuation currency used is United States Dollars
Project Product Costs and Price Structure
| Item | Qty/ day | Qty/yr | @ | Pdn cost/ yr | UPx | T/rev |
|---|---|---|---|---|---|---|
| Woolen Knitwear | 60 | 18,720 | 5.6 | 104,342 | 6.5 | 121,680 |
Profitability Analysis Table
| Profitability Item | Per Day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 390 | 10,140 | 121,680 |
| Less: Pdn &Operating Costs | 334 | 8,695 | 104,342 |
| Profit | 56 | 1,445 | 17,338 |
