Revolutionary Footware Product Assignment Example | Topics and Well Written Essays - 1500 words

Revolutionary Footware Product - Assignment Example These statements shall then be used to determine if the project is viable or not. To bring out this details, the report shall develop a marginal costing statement that clearly points out the cost per unit of producing each item of the new footwear product, a break even analysis table and graph that shows the time that the project will take to break even, a cash budget that shows how cash will be utilized across the first 12 months, a forecast income statement that shows how much profits will be made from the project within the first 12 months and a forecast balance sheet that shows the project’s assets and liabilities as at the end of each of the first 12 months of operation. The new footwear product that will be developed is a sports shoe that is made of alligator skin combined with goat skin which is known to be light and comfortable as well as durable enough to fit the potential expected for this project. Alligators are rare species and as such the portion of alligator skin used on each shoe will be minimal. On the other hand, goat skin is readily available therefore the supply of the same is expected to be sufficient (Boer Goats 2011). The footwear product shall be referred to as the ‘sporting’ Financial projections The products revenue forecasts, the profits and the cash flows are based on the following assumptions The goats skin shall be readily available and each alligator skin available shall be utilized to the maximum, Due to the revolutionary nature of the product, the monthly sales are expected to be 50,000 units with a monthly growth rate of 2%. The market for the product is expected to be readily available due to the number of shoe distributors available The footwear product has a high growth potential in the United Kingdom due to its light weight and durability which will make it stand out from the rest of the footwear products available in the United Kingdom and eventually the world at large. The price of the footwear product is expected to be ?40 per unit which is priced based on the quality of the footwear and the competitors as shown by the price of footwear in the UK and the US (All footwear 2011). The production capacity of the production process is expected to run at the optimal point from the beginning of the project (West, Hussey and Bendrey, 2003). Marginal costing cost statement (Evans and Michael 2011). The price of the new footwear product will be equal to ?40 as shown in the marginal cos