Management Accounting

New Business Of

Adam Hussain

Higher Diploma In Marketing

Department of Marketing Management

Faculty of Commerce and Management

University of Kalaniya

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COMPANY OVERVIEW

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EXECUTIVE SUMMARY

Ralhum Sports is planing to star up a new business line in lether ball production and

distribution . Unlike other sports distributors Ralhum Sports is planning to manufacture

Leather ball in a locally operated very unique factory, which provides the identity of “our

Product” with the imported raw materials and under supervision of two leather ball

manufacturing expertise from Pakistan. at value pricing which are cheaper and affordable.

This business aims to get a high profit as well as providing good quality balls with good

looking finishing.

MISSION

We ensure that each of our output (Balls) remain with the best imported quality.

We make sure that our company provide Leather balls at a competitive price, by using

good materials.

VISION

We hope to be the best leather ball manufactures in the Asian region (Quality

,Standards )

Make our ball as the Official Match ball of Sri Lanka Cricket

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PRODUCTS

Ralhum Sports will manufacturing all type of leather ball which are available in the

market. Customers will have the chance of buy all type of leather ball under on roof and they

can offer customized leather balls to the consumers as the factory will locate locally . We use

the best lethers which are imnported from Australia and Pakistan

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MARKET ANALYSIS SUMMARY

Ralhum Sports Faim to be the most Groowing business that provide lether balls to

the Clubs, School, Coaches and Domestric Cricket Boadies. Since Ralhum sports is goin t

manufacture all type of ball , it will suits to all the segmants, we will be covering all the

market segmentation. However, because the markets is very compatitive with all the segmant

which we afford to cover all of them, we decided to divide the target market into the playing

level requerment

Rahum Sports has decided to concentrate the Sri Lanka Leather Ball market at initial

level . We will create sales from Sri Lankan market by distributing through our dealer

network since we target to have a high turnover from the sales. Therefore, our market

analysis chart below represents this market strategy:

15%

19%

22%

44%

Market Analysis

Premier Cricket Club Cricket School Cricket Practice

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SWOT ANALYSIS

STRENGTHS WEAKNESSES

Established Dealer Network

Well equipped factory

Expertise Supervision

New product for Sri Lanka

Manufacturing Industry

Very New Labors

OPPORTUNITIES THREATS

No Consistency of the available

brands.

Cheating by the Exporters

Changes in the customers

preferences.

Establish the Brand Name

MARKETING STRATEGY

MARKETING MIX

PRODUCT

Ralhum Sports planing to provide lether balls to the Clubs, School, Coaches and

Domestric Cricket Boadies with all catogary of products like Match Ball Practice Ball, Indoor

Ball junior Ball and womens lether ball, Since Ralhum sports is goin to manufacture all type

of ball , we will be covering all the market segmentation. because the markets is very

compatitive with all the segmant which we afford to cover all of them, we decided to divide

the target market into the playing level requerment.

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PRICE

The prices of the balls that we offer are cheaper and affordable.Clubs and Schools usually

prefer for a cheaper Ball to With Consistant Qualityt . The price of the Balls are different

according to the their types and Grades :

Super Cavelier Match Balll White – 800.00

Super Cavelier Match Balll Red – 800.00

PLACE

As Ralhum Sports having a established dealer network we have decided to distribute the

product among the dealers and promote through them, that consumers all so will trust the

product as they have the trust on the distributors

PROMOTION

To promote the brand among the target audience we desided to sponsor for the colombo

distric school tournament and the Island wide 1st Division League tournamment.

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PRODUCTION PROCESS

These are the following process that required for the production of leather ball :

Leather, wool,

STEP 1: The Operation department of Ralhum Sports will deal with the suppliers and place

the order of ingredients/raw materials need to be use for making each type of the Balls .

STEP 2: Then department will choose and select the best quality of raw materials to produce

Balls.

STEP 3: The department will purchase all the raw materials that have been chosen for

making the Balls .

STEP 4: After purchasing the raw materials, we will divide all the ingredients based on the

type of Balls .

STEP 5: Next, we cut and devide in to the need full sizes.

STEP 6: Make the balls buy striching acording to the sizes

STEP 7: Make the Colours Defereciation

STEP 8 : Put the Size and the modle No on the ball to differentiate between each types of

Balls .

STEP 8: Deliver to the Packaging Depart Ment

STEP 9 : Packeg the products with 6 balls per box

STEP 10 : Deliver to the Stores

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RAW MATERIALS

Ralhum Sports produces 5 types of Balls which are . The following are details for

raw material (ingredient) use to make sandwiches.

TYPES OF Balls Super Cavelier

Match Balll

White

Super Cavelier

Match Balll

White

RAW

MATERIALS

Leather

Wool

Tallow

Yaan

Rubber

Colour

Leather

Wool

Tallow

Yaan

Rubber

Colour

COST PRICE PER UNIT QUANTITY TYPE OF COST

Leather 32 80Meter Variable

Wool 20 5 Meter Variable

Yaan 18 5 Meter Variable

Rubber 8 30g Variable

Tallow 4.25 20g Variable

Card Board 3.30 1 M Variable

Colour 2 150 ml Variable

Direct Labor 75 Per Hour Variable

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CLASSIFICATION OF PRODUCT COST

VARIABLE COST PER UNIT

We rounded off the cost per unit to two decimal places.

Item Types of Balls

Super Cavelier

White

Super Cavelier

Red

Leather 32 32

Wool 20 20

Yaan 18 18

Tawla 4.25 4.25

Rubber 8 8

Colour 2 2

Card Board 3.30 3.30

Direct Labor 75 75

Total Variable Cost

Per Unit

162.55 162.55

Indirect Labor 3000 Per Week Fixed

Rent 6000 Per Week Fixed

Transportation 2000 Per Week Fixed

Advertisement 10000 Per Month Fixed

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FIXED COST

Price Quantity Total Cost Total Fixed Cost Per Unit

Indirect Labor 3000 Per Week 12000

69000

162.55= 424.48

Rent 6000 Per Week 24000

Transportation 2000 Per Week 8000

Advertisement 25000 Per Month 25000

69000.00

BEP Analysis

Ralhum Sports will have 25% price mark up for each products therefore the price will be

162.55 + 424.48 = 587.3

Selling Price = 587.5 * 0.75 = 783 .00

And will round it as = 800.00

BEP in Units = 69000

800-162.55

= 108 units for both products

BEP in Value =800*108

= 86400/= for each products

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Cash Budget

Ralhum Sports

First Quarter

Jan Feb March

Opening Balance

Income

Cash from Sales

Credit Slaes

Total Cash

300000

320000

180000

400000

517215

400000

40000

440000

758175

240000

240000

Expenditure

Variable Cost

Fixed Cost

Total Expenditure

113785

69000

182785

130040

69000

199040

97530

69000

166530

Net Cash Flow 217215 240960 73470

Clossing Balance 517215 758175 831645

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BUDGETED INCOME STATEMENTS

Ralhum Sports

Budgeted Income Statement

For the 1st Quarter

Sales revenue

183855

157500

72000

1080000

(413355)

Cost of goods sold:

Cost of purchases

Direct labor costs

Production overhead costs

Rent

Total cost of goods sold

Gross margin

75000

24000

666645

(99000)

Other income and expenses:

Selling and administrative

Transport

Total expenses

Net Income 567645

.

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.

CONCLUSION

This business project proved to be helpful to all. I was able to plan and execute a

business in detail even the business is New and its showing that can get good profit . From

the report, i have learnt a lot about the process of starting up a business. i gained a lot of

experience how to handle the business as well as the operation and what a business has to

undergo to become successful by conducting this report. In addition, i have also learnt about

the risk we have to face and how to overcome the risks. Through perseverance and hard

work, I was successful to achieve our budget. This project also helps to enhance My

entrepreneurship skills. In the near future, I am looking forward to continue this business

venture.

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