montavuerde group 11

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MONTAVUERDE

Stone Paver Manufacturing Company

_________________________________________________________________

A Feasibility Study and Accounting System

Presented to the Faculty of the

Department of Accountancy

School of Accountancy and Business Management

Saint Louis University

_________________________________________________________________

In Partial fulfillment

Of the Requirements of the Course

Accounting 403b (Management Consultancy II)

_________________________________________________________________

By:

GUIAWAN, APRIL JOY C.MONSALES, MICHELLE ANN M.

NOVIDA, KATHLEEN MARIE V.

PERALTA, GIEANNY LOISE C.

UNCIANO, KRISTEL MAE V.

March 2012


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Acknowledgement

It is with immense gratitude that we acknowledge the support and help of the persons, the

group of individuals, and institutions who have made the achievement of this work possible.

Unending praises and gratitude to our loving parents, siblings, relatives, mentors and friends,

they have been our inspiration.

We gratefully acknowledge our dear adviser, Dr. Elvira Dacayo, for her advice, supervision, and

crucial contribution from the beginning until the end of this study in order to finish this humble

work.

To our distinguished panel, Mrs. Lorie Ann Barry and Sir Allan Frank Silva who has rendered

much of their time, offered advice and insight throughout our work.

To Hon. Mayor John Rodney Arcinue of Sual, Pangasinan, Ms. Sheryl G. Uson of MENRO, and

Engr. Percinate A. Sison, who have generously gave their permission to adopt their process of

manufacturing eco-friendly stone pavers and provided us almost all of the information that we

need.

To GMA News Anchor Mike Sabado, who helped us in finding the eco-friendly stone paver

project of Hon. Arcinue of Sual, Pangasinan.

To the Baguio General Engineering Contractors, First Premiere Finishing Centre, and LCB Rock

Stone, who patiently responded to our interviews, inquiry and concerns.

And most especially to God Almighty, our creator and source of strength.

And to all those who in one way or another helped in the completion of this humble work, our

most sincere gratitude is extended.

Thank you!


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Table of Contents

Project Summary ...................... i-iii

Market Study 1-7

Logo .. 1Name of the Business ... 1-2

Name of the Product 2

Properties of the Product 2

Uses of the Product 2-3

Market Description 3

Demand 3-5

Supply 5

Demand-Supply Analysis .. 5-6

Price Study 6-7

Marketing Program .. 7

Technical Study .. 8-20

Introduction 8

Manufacturing Flowchart 9

Manufacturing Process ........ 10-11

Machinery and Equipment .. 11-13

Plant Location .. 13

Plant Layout .. 14-15

Plant Size and Production Schedule .... 16

Raw Materials and Supplies .. 16-18

Labor Requirements .. 18

Utilities Required .. 19-20

Waste Disposal Method .. 20

Management Study .... 21-27Basic Consideration .. 21

Form of Ownership .. 21-22

Organizational Chart .. 22

Officers and Key Personnel . 22-25

Legal Requirements . 26

Project Schedule ... 27

Financial Study ... 28-56

Major Assumptions . 28-30

Total Project Cost . 30-32

Sources of Financing . 32

Pro-forma Financial Statements

and respective schedules . 33-52

Financial Analysis . 53-56

Socio-economic Study ... 57-58

Employment and Income Generation . 57

Environmental Impact . 57-58

Taxes .. 58


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Accounting System 59-85

Chart of Accounts .... 59-68

Cycles and Flowcharts . 69-73

Internal Controls .... 74-76

Business Documents ...... 77-85

Appendices . 86-91List of Baguio Contractors .. 86-87

Computation of Demand of Baguio Contractors ... 87-88

Computation of Quarterly Demand of Baguio /

Dealers of Stone Pavers .... 88-89

Articles of Partnership .... 89-91

Curriculum Vitae . 92-93

Government forms . 94-113


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PROJECTSUMMARY


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i

PROJECT SUMMARY

I.Name of the enterpriseMONTAVUERDE is the chosen name of the business. The name of the business is derived from

the prominent Family Names of the partners, namely: Monsales, Peralta, Novida, Unciano, and Guiawan.

Mon(Monsales), Ta(Peralta), Vuer(Novida, Unciano, Guiawan), De(meaning, this is). We believe that the

name best represent us and the Big name we hoped the company would be. The partners have

formulated several names until they have arrived to the said name. They chose MONTAVUERDE for its

enticing and catchy sound that would have a major part with the marketability of the enterprise.

II.LocationLocation of business is really an essential part in putting up a business. The plant will be situated

in 1,200 square meters vacant lot located at Naguilian Road, Baguio City. The place also offers distance to

the residential areas that might be disturbed by the sound of operations. The plant is approximately 2

kilometers or 5 minutes drive from Irisan dumpsite where plastic waste will be sourced.

III.Project Long-range ObjectivesThe objectives of MONTAVUERDE after 10 years are:

a) To be able to establish a good name in the industry and remain competitiveb) To be able to increase two or three times the net incomec) To be able to expand the business. This expansion shall increase work force, upgrade equipments and

facilities while maintaining quality with our services.

d) To be able to increase its market sharee) To be able to promote community development while reducing the need for new landfills, preventing

pollution, saving energy, and reducing greenhouse gas emissions.

IV. Feasibility Criteria

To obtain favorable results from the operations is the main criterion of this project. Right

product, location, price, target market and management are the keys to the success of this business.

Social responsibility is also considered for the business to be feasible since target market will support

business who promotes eco-friendly products by decreasing the harmful effects of plastics to the society.


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V. Highlights of the Project

1. History

Stone pavers are starting to be recognized as unique and elegant flooring materials in the

Philippines. Contractors are choosing stone pavers to be used for their projects because it is easier to

install and more durable than other flooring materials. The researchers come up with the idea that this

product will be tested for feasibility since there are still few manufacturers of stone pavers in the

Philippines.

2. Project Timetable

MONTAVUERDE will commence its operation by the start of January in the year 2013. The

feasibility study of the project is in progress.

3. Mode of Financing

Each partner will invest an amount of P 2,500,000.00 for initial contribution. This P 2,500,000

comes from the partners inheritance, personal loan, individual income, and savings. The personal loan

will be at the risk of the partner and not of the partnership.

VI. Major Assumptions and Summary of Findings

1. Market FeasibilityThis area identifies the market, demand, and supply and other factors that affect the market.

Based on our findings, an existing unsatisfied demand is uncovered, thus leading to the feasibility of the

business.

MONTAVUERDE offers a new, innovative, environment friendly, and financial friendly product

named as PAVERTRAX. Pavertrax is basically used for flooring system. Concrete paving blocks can be

used for walkways, patios, pool decks and driveways.

2. Technical FeasibilityMaterials, equipment, personnel and utilities needed in the production process for stone pavers

are vital in this study.

The production processes have the following stages: making of mixture 1 (for the top layer),

making of mixture 2 (for the base), and the making of the stone pavers using the auto paver making

machine. MONTAVUERDE also ensures that it purchases quality standard machinery and equipment.


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The Pavertrax plant will be situated in 1,200 square meters vacant lot located at Naguilian Road,

Baguio City. The place also offers distance to the residential areas that might be disturbed by the sound of

operations. The plant is approximately 2 kilometers or 5 minutes drive from Irisan dumpsite where plastic

waste will be sourced.

3. Management FeasibilityMONTAVUERDE will be managed by the three capitalist-industrial partners together with the

newly hired employees. Two partners will only be capitalist partners. MONTAVUERDE strictly complies

with Labor Requirements. The higher officials monitor and evaluate the personnel performance to ensure

their efficiency and effectiveness as human capital.

MONTAVUERDE also gives emphasis on its legal and social and environmental responsibilities by

securing licenses, paying taxes, paying premium dues of the employees to SSS/PAG-IBIG/PhilHealth,

complying with the Labor Code, securing the employees and the community from possible hazards cause

by the operation and disposing residues properly and ensuring sanitation in the workplace.

4. Financial FeasibilityMONTAVUERDE Company has projected its financial statements for the next five years.

MONTAVUERDE secures its resources and assets both physical and intangible by employing quality,

economy, and efficient and effective internal control system.

MONTAVUERDE has also projected its income for five years will be P 492,561.64, P 551,160.23,

P 1,175,400.23, P 2,157,539.70, and P 3,124,999.57. MONTAVUERDEs initial operating capital of

P 12,500,000 will be contributed equally by the partners.

5. Socio-Economic FeasibilityThis area discusses the social responsibility of MONTAVUERDE. MONTAVUERDE on its operation

will consider the local people through hiring of workers. We will be providing job opportunities to many

individuals and would eventually minimize problems of unemployment and poverty. With its main

product, Pavertrax it will reduce Baguio Citys biggest problem, which is the garbage since we are using

recycled plastics. Recycling plastic helps the environment by reducing the amount of space used in a

landfill for plastic products. MONTAVUERDE will also practice its corporate good governance by ensuring

legal papers and licenses for its operation as well as paying the taxes due to the government.


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MARKETSTUDY


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MARKET STUDY

The market study is an important part of every feasibility study because it is centered in

the determination of demand for a certain product or service. It is mandatory to have knowledge on what

the target market needs and/or wants to be satisfied. Every business is motivated by profit. To be able to

achieve this goal, perceived market should be satisfied by the services or products offered by a firm.

Without determining the demand, there could be no market. Without market, feasibility study is

absolutely not possible.

Logo

The logo depicts what the business is all about. The letter M stands for MONTAVUERDE, the name of

the partnership. The cycle represents the 3R concepts in recycling. Recycling Plastics are our main concern

by promoting eco-friendly products like Pavertrax and helping to save the environment. Then the color,

partners chose white showing MONTAVUERDEs pure and clean intentions of creating a cleaner and

greener Baguio. The letter M is made up of rigid lines that are interconnected. Rigid, solid and resist

deformation same goes with our product. MONTVUERDE offers a product in its best state and quality.

Also, the spaces in between the lines shows flexibility, openness to new ideas, which would make us serve

our customers better and would make them more satisfied.

Name of the Business

MONTAVUERDE is the chosen name of the business. The partners have formulated several

names until they have arrived to the said name. The name of the business is derived from the cluster of

prominent Family Names of the partners, namely: Monsales, Peralta, Novida, Unciano, and Guiawan.

Mon (Monsales), Ta (Peralta), Vuer (Novida, Unciano, Guiawan), De (meaning, this is). The partners

believe that the name best represent them and the Big name they hoped the company would be. They

chose MONTAVUERDE for its enticing and catchy sound that would have a major part with the

marketability of the enterprise.

MONTAVUERDE envisions itself to become an Innovative Global Leader, upholding quality at

every stage and maintain consistency. By its deeds, shows the entire industrial world what sustainability is

in all its dimensions: People, process, product, place and profits and in doing so MONTAVUERDE will

become restorative through the power of influence.


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MONTAVUERDE will become the first name in commercial and institutional interiors worldwide

through its commitment to people, process, product, place and profits. It will strive to create an

organization wherein all people are accorded unconditional respect and dignity; one that allows each

person to continuously learn and develop. MONTAVUERDE will focus on product (which includes service)

through constant emphasis on process quality and engineering, which will combine with careful attention

to our customers needs so as always to deliver superior value to our customers, thereby maximizing all

partners satisfaction. Partners will honor the places where business will be done by endeavoring to

become the first name in industrial ecology, an enterprise that cherishes nature and restores the

environment. Interface will lead by example and validate by results, including profits, leaving the world a

better place than when partners began, and they will be restorative through the power of our influence in

the world.

Name of the Product

MONTAVUERDE offers a new, innovative, environment friendly, and financial friendly product

named as PAVERTRAX. The product is named as such because it directly describes its purpose, Paver

means flooring. It is used to create a hard surface for an outdoor living space such as a terrace or patio.

The partners believe that the name has a unique retaining power that would lure customers to try the

product.

Properties of the Product

Pavertrax is mainly made of p lastic waste supplemented with water, sand, and cement. Plastics

are composed of fillers, pigments, and other additives like polymer and polyvinyl chloride. The cement will

bind the plastics for it to be concrete. It will hold the plastics together, firmer and better. The

manufacturing of this product was adopted from the paver-making project of Mayor John Rodney V.

Arcinue of Sual, Pangasinan. The partners were given consent to adopt the said idea for this business. This

product will help in minimizing one of the biggest issue in Baguio City which is garbage. The raw materials

are acquired through junk shops and the well-known dumpsite of Baguio, Irisan Dumpsite. Pavertrax is a

different kind of flooring system, mainly because it is made of plastic waste. It has a lower cost than of

the other stone pavers considering that it uses recycled plastics.

Uses of the Product

Pavertrax is basically used for flooring system. Concrete paving blocks can be used for

walkways, patios, pool decks and driveways. If you are looking for sustainable flooring material,

Pavertrax is a sure home run. It has endless and commercial applications of the product. Pavertrax

transform landscapes into beautiful dreamscapes.


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Market Description

1. Users of the ProductThe major users of Pavertrax are the professionals engaged in building constructions, such

as general engineering contractors who mainly use the product for their respective projects. Pavertrax

could also be used by the micro market, namely the households, because of its functionality and easy

installation. They could definitely purchase and use it for their own homes.

2. Geographical dispersionAfter the companys business operations has proven to be profitable and companys reputation

has been established, it will penetrate the market nationwide and eventually, internationally.

The partners decided to buy a 1,200 square meters vacant lot where the plant will be

situated at Naguilian Road, Baguio City. The space, as examined, is wide enough and safe to conduct

companys manufacturing operations and activities.

Demand-Supply Analysis

Demand

The MONTAVUERDEs target markets are the contractors engaged in General engineering and

the prospective dealers in Baguio City. The list of the contractors has been provided by Department of

Trade and Industry Baguio City and will be seen at the Appendix section. The dealers were only

discovered by the researchers because DTI and Baguio City Hall do not have the exact list of dealers of

stone pavers in Baguio City.

The demand for stone pavers cannot be traced from the agency that may provide data for such

product. The researchers did an interview to the contractors to ask how many stone pavers were bought

for their projects in the past 3 years (2009-2011). Some contractors do not respond to our interview

because their projects are not into flooring system but into construction of building only. Some are not

interested to use stone pavers since the product is not that well-known.

On the following table are the contractors who bought stone pavers and number of stone pavers

bought for their projects for the past 3 years (2009-2011):


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Table 1

List of Contractors

Year Contractors Name Number of stone pavers bought for a certain project

2009 Bondsbuilt Enterprises 299,500

Melecio Contruction 94,700

E.M. Muncal Construction 204,000

2010 Mountain Horizon 193,400

Segal construction 217,500

Diate Construction and Allied Services 72,600

2011 A.I.P. Construction 392,500

Segal Construction 197,500

For the dealers, the researchers did an interview to ask how many stone pavers were bought

daily/monthly/yearly. The dealers (LCB Rock stone and First Premiere Finishing Centre) gave information

how many stone pavers bought monthly from the manufacturers in Manila. Below are the dealers who

responded to our interview and the number of stone pavers bought per quarter for the year 2011:

Table 2

List of sold Stone pavers by Dealers

QUARTER Number of stone pavers sold by dealers

1st 150,325

2nd 168,395

3rd 166,522

4th 159,947

Table 3

PROJECTED VALUES OF CONTRACTORSStandard Deviation= 9,710.93

YEAR A b (X) Yc

2012 45433.33 5,900.00 4 589,033

2013 45433.33 5,900.00 5 594,933

2014 45433.33 5,900.00 6 600,833

2015 45433.33 5,900.00 7 606,733

2016 45433.33 5,900.00 8 612,633

Table 5

PROJECTED VALUES

YEARS TOTAL DEMAND2012 1,277,411

2013 1,326,500

2014 1,375,589

2015 1,424,678

2016 1,473,766

Table 4

PROJECTED VALUES OF DEALERSStandard Deviation= 2,068.30

YEARS AMOUNT

2012 688,378

2013 731,567

2014 774,755

2015 817,944

2016 861,133


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The Statistical Straight Line method was used by the researchers to compute the projected demand of

contractors and dealers because it yields the smallest standard deviation thus; it will give the most

reliable forecast of demand.

(Please see Appendix for the Computation)

Supply

Based on information provided by the Department of Trade and Industry (DTI) and Securities and

Exchange Commission (SEC), there were no sole proprietorships/partnership/corporations intended for

the production of stone pavers registered in Baguio City. This implies that there are no big competitors,

who currently supply the demand of contractors engaged in General engineering and current dealers in

Baguio City. All the contractors and dealers that the researchers had interviewed purchase their stone

pavers in Metro Manila. Most of the suppliers who manufacture this product are from Metro Manila.

MONTAVUERDE will be the first manufacturing company who will produce special stone pavers in Baguio

City and be able to supply the increasing demand of stone pavers in the City. For that reason, theresearchers just assumed that the present supply for the product is zero (0).

Demand Supply Analysis

The demand and supply analysis determines the amount of unsatisfied demand and the share of

the market of MONTAVUERDE.

The following table shows the target market share for Pavertrax for the targeted dealers and

contractors of Baguio City.

Table 6: Demand Supply Analysis

Year

Projected Demand Normal Capacity Unsatisfied Demand

a (3,600*300 Days) (a-b)

2012 1,277,411 1,080,000 197,411

2013 1,326,500 1,080,000 246,500

2014 1,375,589 1,080,000 295,589

2015 1,424,678 1,080,000 344,678

2016 1,473,766 1,080,000 373,766

The results show that there is an increasing trend for projected Demand. However, there is no

projected supply because there is no manufacturing company currently operating in Baguio City. This

shows that a manufacturing company of stone pavers here in Baguio City is needed to supply theincreasing demand of stone pavers. Our company can capture 100% of the target market in Baguio City

but because of limited capacity of equipment, the company can only satisfy the 1,080,000 demand of

stone pavers out of the projected demand for the next 5 years. The unsatisfied demand means the

demand that cannot be supplied by the company (MONTAVUERDE) in Baguio City. This unsatisfied

demand can be supplied by the manufacturers outside the vicinity of Baguio City.


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The researchers are positive about the marketability of the product for the reason that our

company will be the first one to offer environment friendly stone pavers in Baguio City. Since our product

is not well-known to the public as a flooring system, it offers more benefits than the normal flooring

materials like asphalt, tiles, and concrete stone pavers. One benefit is that a patio or sidewalk made with

Pavertrax allows water to permeate into the ground. This effect slows water and helps prevent runoff.

Also, Pavertrax will not split, break, or deteriorate, making them virtually indestructible. According to

Engr. Percinate A. Sison of Sual, Pangasinan, the product is tested for compressive strength at UP Diliman

and the compression test concludes that the product is stronger and more durable than the usual

concrete stone pavers. The results of the compression test will be seen at the Appendix section.The projected demand-supply will be the basis for coming up with the normal capacity to be

produced by the business. Nonetheless, the proponents of the study are still optimistic of the feasibility of

the business and that MONTAVUERDE will be more profitable and worthwhile enterprise through the

years. Furthermore, the proponents of the study anticipate for uncertainties that might alter this

projection and that assumptions made in this study may not conform to fluctuating events in the business

world.

Price Study

Price is determined by what a buyer is willing to pay, a seller is willing to accept, and the

competition is allowing to be charged. With product, promotion, and place of marketing mix, it is one of

the business variables over which organizations can exercise some degree of control.

Factors such as pricing objectives, customers willingness and capacity to pay, competition, costs

of manufacturing and selling the product, market demand, economic trend and the perceived value of the

product determine the price. It should meet business goals and objectives in profit and wealth

maximization and social responsibility by creating a competitive edge of the product being priced,

providing customer maximum satisfaction through high quality and eco-friendly product, and enabling

competitive positioning of the product.

The initial price of the product is at P 7.00 per piece. The price is reasonable since the raw

materials are cheaper and price is one of the edges of our product. It is also cheaper compared to other

stone pavers which costs P9.00-10.00. This price is based on initial cost (P4.50) of the product plus 55%

mark up of cost. The mark up is reasonable compare to 100-200% mark up to other stone pavers

manufacturers.

The quality of the product will not be affected in using recycled raw materials because as part of

the factors in determination of price, perceived value of the product is being considered and proper

research, development and innovations will be taken into account and experts will be hired for such.

Every year, there will be an increase in the price but with minimal amount only.


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Marketing Program

MONTAVUERDE aims to provide maximum satisfaction through eco-friendly and quality products

to customer. MONTAVUERDE will primarily produce stone pavers that are mainly made up of plastic

waste.

The product will be affordable and sold at a customer-friendly price. The partners will maintain

20% inventories in the warehouse/stockroom in order to meet the needs of the walk-in customers.

The product will be sold on both credit and cash. The company will give discounts to encourage

early payment of credit. In terms of shipment, it will be FOB shipping point. There will be no slack and

peak season of the product since our product is not seasonal since need for our product depends on the

projects of the contractors and monthly purchase of dealers.

Promotions and advertisement will be use to market the product. MONTAVUERDE will use print

ads such as catalogs. The partners will also use the internet through social networks (Youtube & Blogspot)

and shopping websites (Sulit.com.ph and Mybaguio.biz). And also they come up with our own website to

advertise. The promotional activities for the first year- catalogs and website- will be at an estimated cost

of P 35,000.00.


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TECHNICALSTUDY


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TECHNICAL STUDY

I. IntroductionThe use of pavers, often referred to as paving stones, is growing rapidly on both commercial and

residential construction projects. It can be installed on driveways, patios, pool decks, walkways,

streetscapes, & roadways. Cracking, which is common with traditional asphalt and concrete pavements, is

not an issue with these interlocking pavers due to the joints between the pavers. Interlocking stone

pavers are a flexible system and allow for movement.

Pavers' combination of strength, resilient abrasion resistance, and flexibility deliver highly

durable, crack-proof pavement able to handle all types of wheeled traffic and pedestrians with very low

maintenance requirements. Pavers can be used in all climates and can be walked on immediately upon

completion.

Pavers are easy to maintain. Regular sweeping and occasional rinsing are usually the most

maintenance needed. Well-manufactured pavers are guaranteed not to crack or delaminate, especially

pavers with complete color saturation.

MONTAVUERDE introduces its product PAVERTRAX, stone paver made from plastics. Pavertrax

are non-slip and guaranteed to endure even the harshest conditions from shifting soil to extreme hot

and cold temperatures without cracking or crumbling. These are sand jointed to allow flexibility, which

eliminates the possibility of joints cracking. The plastic material makes it stronger compared to usual

stone pavers.

Using plastics to manufacture new floor pavers helps the environment to recycle products that

would have been disposed of in landfill sites. Considering the multi millions of plastics disposed of every

year in all countries, the researchers found out that this product will help to reduce plastic disposal and

eliminate landfill space like Irisan dumpsite located in Baguio City.

The process of making stone pavers is not difficult since it is employed with modern

technologies. Using the auto paver making machine, the projected demand seen in the market study will

be satisfied by producing its normal capacity of 3,600 stone pavers. The process of making stone pavers

will be shown on the next page for further understanding.


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Manufacturing Flowchart

Mixture 2

Spraying of plastics using Plantex Odor Eliminator

(3 minutes)

Put 80 Liters of water into the mixture 2

(2 minutes)

Mixing the hydraulic cement,

fine sand, and water using

hydraulic concrete mixer (10

minutes

Mix the pulverized plastics with hydraulic cement an

concrete sand using hydraulic concrete mixer (8

minutes er roduction

Pour the mixture 1 and install it

as the top layer into the auto

paver making machine (2

minutes)Pour the mixture 2 and install it as the base into

the auto paver making machine (2 minutes)

Preparation of 8 kilos of plastic materials (any kinds o

plastics), one bag of hydraulic cement, 4 cubic feet of

fine sand, and 80 Liters of water (10 minutes)

For the top layer of the pavers,

prepare one-half bag of hydraulic

cement, one cubic yard of fine

sand and 100 Liters of water (10minutes

Pulverizing the plastics using Plastic Shredder

(10 minutes per 8 kilos of plastics)

Making of stone pavers through the auto paver making machine (25 minutes)

S

IM

U

L

T

A

N

E

OU

S

L

Y

Legend:

One (1) Hour = 450 stone pavers p

batch

3600 stone pavers = 8 batches

8 Hours = 8 batches

Finished Product


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II. Manufacturing ProcessPavertrax

Raw Materials to be used:

Plastics (any kind of plastics)

Hydraulic Cement

Fine Sand

Water

Making of Mixture 1 (for top layer of the Pavertrax):

1. Preparation (10 minutes)Prepare the materials needed for the mixture 1 such as: one-half bag of cement, one cubic foot of fine

sand, and 100 Liters of water (a production of 450 pavertrax)

2. Mixing (10 minutes)Mix the cement and water into the hydraulic concrete mixer.

3. Pour the mixture 1 into the auto paver making machine and install it as the top layer of the paver (2minutes)

Making of mixture 2 (for the base of pavertrax):

1. Preparation (10 minutes)Prepare the materials needed for the mixture 2 such as: 8 kilos of plastics, one bag of hydraulic

cement, 80 Liters of water and 4 cubic feet of fine sand (a production of 70 pavertrax).

2. Odor Elimination (3 minutes)As the plastics are placed into the conveyor, it is sprayed with the Plantex All-in-one solution Odor

Eliminator to remove the unpleasant smell of the plastics.

3. Pulverizing (10 minutes)Put the 8 kilos of plastics into the plastic shredder until it becomes pulverize. This pulverized plastic

will be transfer into the hydraulic concrete mixer through a conveyor.

4. Mixing (8 minutes)Once the pulverized plastic is transferred into the mixer, mix it with hydraulic cement and concrete

sand. Put 80 liters of water into the mixture 2 (2 minutes) Once the mixture is finished, it is transferred

to the auto paver making machine.

5. Pour the mixture 2 into the auto paver making machine and install it as the base of the paver (2minutes)

Making of Pavertrax:

Once the top layer (mixture 1) and the base (mixture 2) are already installed on the auto paver making

machine, the machine will start making the pavers. The mixture for the top layer and base are poured to


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the molder respectively. The machine will mold the mixture for 23 minutes and 2 minutes for drying

purposes.

III.Machinery and EquipmentMACHINERIES

Hydraulic Concrete Mixer

Description: It is a device that homogeneously

combines cement, aggregate such as sand and

pulverized plastics, and water to form concrete.

Cost: P 90,000

Quantity: 2

Supplier: Henan Dasion Mechanical Installation Co., Ltd.

Capacity: 560 Liters charging volume

Plastic Shredder

Description: It can shred/grind sando bags, PET bottles, plastic

containers foil packs, etc.

Cost: P350,000

Quantity: 1

Supplier: Jiangsu Lianguan Science & Technology Development

Co., Ltd., ChinaCapacity: 350 of plastics/8 hours

Auto Paver Making Machine BW-119

Description: Use to make pavers

Cost: P400,000Quantity: 1

Supplier: Jiangsu Lianguan Science & Technology

Development Co., Ltd., China

Normal Capacity: 3600 blocks/8 hours
http://en.wikipedia.org/wiki/Cementhttp://en.wikipedia.org/wiki/Aggregate_(composite)http://en.wikipedia.org/wiki/Waterhttp://en.wikipedia.org/wiki/Concretehttp://www.lg-machine.com/http://www.lg-machine.com/http://www.lg-machine.com/http://www.lg-machine.com/http://www.lg-machine.com/http://www.lg-machine.com/http://www.lg-machine.com/http://www.lg-machine.com/http://www.lg-machine.com/http://www.lg-machine.com/http://en.wikipedia.org/wiki/Concretehttp://en.wikipedia.org/wiki/Waterhttp://en.wikipedia.org/wiki/Aggregate_(composite)http://en.wikipedia.org/wiki/Cement


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Hinged Steel Belt Conveyor

Description: Conveyors are durable and

reliable components used in automated

distribution and warehousing

Price: P200,000/setQuantity: 2 sets

Supplier: Titan Industries, Inc.

FACTORY EQUIPMENT

OTHER FACTORY EQUIPMENT

FACTORY EQUIPMENT UNIT COST QUANTITY PRICE

Fire Extinguisher P 999.75 2 P 1,999.50

Exhaust Fan P 1,179.75 4 P 4,719

Floor polisher P 23,649.75 1 P 23,649.75

Wheel barrow P 1,850 2 P 3,700

Push Carts P 1,350 1 P 1,350

Water Hose P 1,159.75 2 P 2,319.50

Factory suit P 589.75 4 P 2,359

DELIVERY EQUIPMENT

Industrial Weighing Scale

Description: Use to make accurate measurement for the weight of

plastics and cement

Cost: P4,000

Quantity: 1

Supplier: Artech Scientific Trading Co.

Chapin 4gal Commercial Backpack Sprayer

Description: Use to eliminate the odor of plastics by spraying the

Plantex Odor Eliminator

Cost: P1,500

Supplier: Ace Hardware

Quantity: 1

Isuzu Delivery Truck

Description: Use to deliver pavers to respective clients and purchased

materials to the plant

Cost: P250,000

Supplier: JK Motor supplies, Inc.

Quantity: 2


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OFFICE EQUIPMENT

OFFICE EQUIPMENT UNIT COST QUANTITY PRICE

Computer P 18,000 2 P 36,000

Telephone w/ fax P 4,480 1 P 4,480

Wall clock P 209 1 P 209

Calculator (14D Calcu 2way) P 680 3 P 2,040

Printer P 2,300 1 P 2,300

Trash can P 1374.75 1 2749.75

Magazine Box open P 138.50 3 P 415.50

White Board (36x24) P 820.00 1 P 820.00

Cork Board (2X3WW) P 465.00 1 P 465.00

Scissors P 50.25 2 P 100.50

Stapler P 196.50 2 P 393

Puncher P 235 1 P 235

OFFICE FURNITURE AND FIXTURES

FURNITURE & FIXTURES UNIT COST QUANTITY PRICE

Office table P 2,000 4 P 8,000

Swivel chairs P 550 4 P 2,200

Filing cabinets P 3,000 2 P 6,000

Cash Box P 1,599.75 1 P 1,599.75

FACTORY FURNITURE AND FIXTURES

FURNITURE & FIXTURES UNIT COST QUANTITY PRICE

Monoblock chairs P 300 4 P 1,200

Table P 2,000 1 P 2,000

V. Plant Location

Location of business is really an essential part in putting up a business . The Pavertrax plant will

be situated in 1,200 square meters vacant lot located at Naguilian Road, Baguio City. The place also offers

distance to the residential areas that might be disturbed by the sound of operations.

The plant is approximately 2 kilometers or 5 minutes drive from Irisan dumpsite where plastic

waste will be sourced.


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Plant Layout


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VI.Plant Size and Production ScheduleThe plant size will be composed of two buildings. Area of Building A will be 290 square meters while the

area of Building B will be 700 square meters. The manufacturing plant is located at Naguilian Road, Baguio

City.

Considering the sizes of all machines and equipment to be installed as well as the sufficiency of space

needed to facilitate material handling and for laborers to carry out their assigned task conveniently and

effectively, the factory space would be sufficient to accommodate all facilities and workers.

MONTAVUERDE will operate at normal capacity. No production during breakdowns, non-working

holidays, extra ordinary circumstances like strikes and calamities that will hinder factory workers and

other employees from going to the plant. The regular operating year is equivalent to 300 days computed

as follows:

Total number of days in a year 365

Less:

Total number of sundays in a year 52

Regular Holidays 10

Special Holidays 3 65

Total regular working days in a year 300

The annual production of stone pavers will be computed as follows:

Production of stone pavers per cycle 450

Multiply by: 8 Production cycles per day 8

Production of stone pavers per day 3,600

Multiply by: Total working days in a year 300

Annual production of stone pavers 1,080,000

VI. Raw Materials and SuppliesRAW MATERIALS

Plastic Bags

Description: It is a type ofpackaging made of thin, flexible, plastic film, nonwoven fabric, or plastic textile.

Plastic bags are used for containing and transporting goods.

Price: P17.00 per sack

Supplier: Junk shops near Irisan Dumpsites
http://en.wikipedia.org/wiki/Packaginghttp://en.wikipedia.org/wiki/Nonwoven_fabrichttp://en.wikipedia.org/wiki/Textilehttp://en.wikipedia.org/wiki/Textilehttp://en.wikipedia.org/wiki/Nonwoven_fabrichttp://en.wikipedia.org/wiki/Packaging


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Plastic Bottles

Description: It is a bottle constructed ofplastic, with a neck that is narrower than its real body and an

opening at the top. The mouth of the bottle is normally sealed with a plastic bottle cap. Plastic bottles are

typically used to store liquids such as water, soft drinks, motor oil, cooking oil, medicine, shampoo, milk,

and ink.

Price: P20.00 per kilo

Supplier: Junk shops near Irisan Dumpsite

Cement

Description: It is a binder, a substance that sets and hardens independently, and can bind other materials

together. Cement used in construction is characterized as hydraulic or non-hydraulic. Hydraulic cements,

which will be used in this study, harden because of hydration, chemical reactions that occur

independently of the mixture's water content.

Price: P120 per bag

Supplier: Holcim Philippines Inc., Baguio

Fine sand

Description: Fine sand consists of natural sand or crushed stone sand. It is hard, durable, clean and be free

from organic matter etc.

Price: P2,300.00 per load

Supplier: APCO Hardware and Construction Supply, Baguio

FACTORY SUPPLIES

Plantex All-in-One Solution Odor Eliminator

Description: A unique and organic liquid concentrate that eliminates offensive odors at the very sourcea

solution for all types of odor.

Price: P640.00

Supplier: George Mapile, Jr.

OTHER FACTORY SUPPLIES

Factory Supplies UNIT COST QUANTITY TOTAL COST

Creston Dust Masks P 19.75 4 P 79

Creston Gloves P 54.75 4 P 219
http://en.wikipedia.org/wiki/Bottlehttp://en.wikipedia.org/wiki/Plastichttp://en.wikipedia.org/wiki/Bottle_caphttp://en.wikipedia.org/wiki/Waterhttp://en.wikipedia.org/wiki/Soft_drinkshttp://en.wikipedia.org/wiki/Motor_oilhttp://en.wikipedia.org/wiki/Cooking_oilhttp://en.wikipedia.org/wiki/Medicinehttp://en.wikipedia.org/wiki/Shampoohttp://en.wikipedia.org/wiki/Milkhttp://en.wikipedia.org/wiki/Inkhttp://en.wikipedia.org/wiki/Inkhttp://en.wikipedia.org/wiki/Milkhttp://en.wikipedia.org/wiki/Shampoohttp://en.wikipedia.org/wiki/Medicinehttp://en.wikipedia.org/wiki/Cooking_oilhttp://en.wikipedia.org/wiki/Motor_oilhttp://en.wikipedia.org/wiki/Soft_drinkshttp://en.wikipedia.org/wiki/Waterhttp://en.wikipedia.org/wiki/Bottle_caphttp://en.wikipedia.org/wiki/Plastichttp://en.wikipedia.org/wiki/Bottle


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OFFICE SUPPLIES (for the first 3 months)

Office Supplies PRICE QUANTITY TOTAL COST

Vouchers P 51.25 3 P 153.75

Official Receipts P 47.75 1 P 47.75

Delivery Receipt P 40.00 1 P 40.00

Receiving Report P 64.75 1 P 64.75

Long and short coupon bond P 360 2 P 360.00

White board Marker P 42.50 1 P 42.50

Ballpens (set-3) P 10.50 3 P 31.50

VII. Labor requirements

MONTAVUERDE will need 4 employees directly involved in the production process of Pavertrax. The four(4) production workers is divided based on their nature of work: one operator of auto paver making

machine, one operator of hydraulic concrete mixer for mixture 1 and preparer of raw materials of mixture

1, one operator of hydraulic concrete mixer and preparer of raw materials of mixture 2, and one person

for stock room (storage of stone pavers). Two security guards will be outsourced from Warriors Security

Detective and Investigative Services Inc. The security expense will be seen on the financial part of the

study.

All employees will start their work at 8:00 am in the morning until 5:00 in the afternoon including the 1

hour break from 12:00 to 1:00 since production per cycle consists of 1 hour. Eight (8) production cycles

will be done per day by the workers. List of all the employees that will be hired is shown below together

with their corresponding daily rates:

Position # of employees Daily Rate

Inventory Clerk 1 280

Cashier 1 280

Utility Man 2 250

Delivery Man 2 280

Production Workers 4 250


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IX. Utilities required

1. Electric powerThe electricity will be supplied by the BENECO (Benguet Electric Cooperative, Inc.). Energy rates apply

as follows:

2. Water supplyThe water supply of the company will be supplied by Baguio Water District (BAWADI). The water

supply from BAWADI will be continuous for 24 hours. There would be a water tank located at the

back of the plant for emergency purposes like water shortages especially abrupt and unannounced

water shortages. During water shortages, the water will be ordered from a water delivery.

Monthly Water Consumption (75 cubic meter*57/cu.m) P 4,275.00

Multiply by: number of months in a year _____ 12

Water Consumption for 1st

year P51,300.00

3. TelecommunicationsCommunication services will be provided by Philippine Long Distance Telephone (PLDT), the countrys

biggest telephone service provider company.

Estimated Electric Consumption per month (751.5 kwh x P9.969 rate/kwh) P 7,491.70

Multiply by: 12 mos. 12

Electric Consumption for 1st year P89,900

Monthly Communication Expense P 2,000.00

Multiply by: Number of months in a year 12

Communication Expense per year P 24,000.00

Add: Installation fee 3,500

Telecommunication cost for 1st year P 27,500.00


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4. FuelFuel services will be provided by Petron Corporation, the largest oil refining and marketing

company in the Philippines.

X. Waste Disposal Method

For this manufacturing company, there will be no waste disposal method for plastics since all plastics

will be used for the production. There will be no waste since the company aims to recycle all kinds of

plastics with the use of cement and sand to produce our product, PAVERTRAX. For the sounds of the

machine, the plant will be located far from the residential area so the sounds will not disturbed

people situated near the area. For the companys water waste, all drainage is connected to the main

drainage tank and it may be used for watering plants.

Monthly Fuel Expense ( P 58 x 5.4598 liters x 25 days) P 7,916.7

Multiply by: Number of months in a year 12

Communication Expense per year P95,000.00


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MANAGEMENSTUDY


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MANAGEMENT STUDY

I. Basic ConsiderationEvery business is formed in order to achieve certain goals. These goals are geared towards the

betterment of the market. Success in the business is achieved through the exerted effort of the

management. It gives rise to different strategies being performed and effectively put into action. The

situation of the business reflects the effectiveness and the ability of the managers. The ability to survive

and grow starts with the managers ability to envision how a business can satisfy market needs and

continuous with the managements ability to lead and direct its employees towards the mission.

The partners envision MONTAVUERDE to be the leading manufacturer of stone pavers in Baguio City.

Its mission is to provide high quality and eco-friendly stone pavers that are cost competitive to satisfy

customers needs.

Our purpose is not only centered on gaining profits, but more importantly, MONTAVUERDE intend to

help our country by providing employment, by helping save our environment and by serving the customer

to their satisfaction. MONTAVUERDE exists to create employment and provide the employees the best

benefits and security in the performance of their work. The partners believe that this could at least

alleviate our present economic condition particularly with our low employment rate. MONTAVUERDE is

also geared to protect the environment by having eco-friendly stone pavers and thereby complying

environmental policies of manufacturing industries. Lastly, MONTAVUERDE assures that the products are

safe and manufactured according to the standards and qualification to satisfy customers wants and

needs. In these manners, the partnersare fulfilling our society as well as our environmental responsibility

to our community.

II. Form of OwnershipMONTAVUERDE will operate under a general partnership. MONTAVUERDE have chosen this form of

partnership because partnerships are relatively easy to establish, unlike corporations, by a voluntary

agreement between two or more people and it does not entail costs such as incorporation fees, legal fees

connected with the preparation of the application for incorporation, expenses incurred by the founders

and numerous other expenses. The ability to raise funds may be increased because two or more partners

may be able to contribute more funds and their borrowing capacity may be greater is also an advantage.

A partnership is subject to less government regulations. Also, partnership may benefit from the

combination of varied talents and complementary skills of two or more people that could be combined

and used in managing the business, can be cost-effective as each partner specializes in certain aspects of

their business, and allow for more creative brainstorming. Finally, a partnership can maintain the blend of


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a personal and professional working environment since the organization is not as simple as a sole

proprietor and not as complex as a corporation.

III. Organizational Chart

IV. Officers and Key Personnel1. PARTNERS

Partners are responsible for the overall operation of the business. They are the ones responsible

in setting the goals and objectives of the partnership, formulate strategic plans and policies upon the

commencement of the business activities and for decision making functions in all areas of the business. All

of the partners have their own task.

Partners shall:

Formulate rules and regulations for the general operation and management of the firm Carry the burden of business liabilities Purchase, receive, take and otherwise acquire in the name of the business properties, rights, or

privileges

Establish incentives or compensation plans for the employees including top management Conduct regular or special meeting Create, implement, and amend the law of the business Authorize the issuance of bank checks.

Managing Partner

Production PartnerFinancial Partner

Inventory Clerk

Production

Worker

Cashier

Utility Man Delivery Man


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Monitor all employees. Have authority to hire and dismiss employees. Substitutes employees that are absent. Evaluate the performance of employees.

Capitalist- Industrial Partner (General Manager) - Gieanny Loise C. Peralta

The managing partner is in charge for the overall direction and control of the companys entireoperation. She supervises and controls the overall performance of the business and responsible for

planning, organizing, leading and coordinating the strategic planning functions and the sections of

the business.

She also takes care of the overall orderliness, wellness and security of the company. She isprimarily responsible in monitoring the sufficiency and competence of all employees. She is tasked

to regularly update the general standards, controls, procedures, policies and by-laws set by the

business. She directs the utility man and security guard. She is also responsible in documentation ofpertinent papers of the partnership and in monitoring comp anys compliance in all laws set by the

government and regulatory agencies regarding labor matters.

She is also responsible for marketing and sales decision and for developing and implementingstrategies and programs of sales and marketing. She manages all the sales transactions of the

business and examines the contracts with the advertising agencies. She also selects the advertising

medium and distributing channels. She will also work hand in hand with the production partner and

inventory clerk for the availability of the finished goods ready for sale.

Capitalist- Industrial Partner (Production Manager) - April Joy C. Guiawan

The production partner is tasked to establish the overall system in the production of thecompanys product and supervise and control the day-to-day operation. She decides business

decisions needed in the production. She manages all the transactions regarding purchases of

materials necessary in production and monitors, strictly, the controls used to manage the quality of

the product. She supervises and directs production workers. She conducts regular supervision on the

conditions of production and operation equipment, facilities and other assets. She also monitors and

keeps the inventory records of raw materials and finished products ready for sale.

Capitalist- Industrial Partner (Financial Manager) - Michelle Ann M. Monsales

A financial partner has the custody and responsibility of all the funds of the company. She plansthe control and protection of assets and responsible for cash management. She keeps a complete

and accurate record of receipts and disbursements and other commercial transactions entered into

by the business. She prepares the annual budget and appropriations for the business. She is


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responsible in setting the business standards with regards to internal controls in terms of financial

matters. She is in-charge of preparation of payroll of employees salaries and wages based on

current listing of rates and employees income tax returns, update and maintain all accounting

records, focus must be on the financial operation of the company, prepares financial statements and

its analyses, and responsible for computing taxes, contributions and the like.

Capitalist Partners (Kristel Mae V. Unciano and Kathleen Marie V. Novida)

The capitalist partners are partners who contribute money or property to the capital of thepartnership, shares profits and losses of the firm, and fully liable for the partnerships debts.

2.CASHIER In charge of companys transactions of all business oper ation regarding sales receipts and

disbursements

Responsible in preparing daily cash collection report containing summary of the days collection andremits/submits them to the financial manager.

Responsible in the custody of the petty cash fund.3. INVENTORY CLERK Responsible in checking and recording goods delivered to and received by the company as to quality

and quantity.

Reports directly to the Production Manager with regards to the condition, sufficiency and availability ofraw materials needed in the production.

Conducts an inventory count in order to avoid cases of theft, wastages, spoilages and other mattersregarding inventories.

Maintains record of finished goods ready for sale.4.PRODUCTION WORKER Responsible for the production of the companys product Conduct regular repair and maintenance of the equipment, facilities and other assets used in the

production.

Responsible in reporting to the production manager regarding any disruptions in the production toavoid delay and destruction in the operation and production.

Required to follow the quality controls, standards and discipline in the production.5.DELIVERY MAN/ DRIVER Shall deliver goods to designated customers with due diligence. Bring ordered materials to the factory. Responsible in the repair and maintenance of delivery truck that they will be driving


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Responsible in reporting accidents, defects and unusual conditions to the sales/marketing manager.6.UTILITY MAN Responsible for the maintenance of cleanliness and good work conditions within the companys

facilities and premises.

Act as the messenger of the company. From time to time perform minor duties such as purchasing some groceries needed, replace light bulbs,

repairs leaking faucets, and the like.

Basic policies in Employee Management

1.HIRINGRecruitment, selection and hiring of employees shall be authorized and done by the partners.

Applicants will be hired based on the aspects that meet the requirements in the qualifications

enumerated for each position.

2.GENERAL EMPLOYMENT REGULATIONa.EMPLOYER-EMPLOYEE RELATIONSHIP

There will be employer-employee between the parties. The partners will be the employers and the

production workers, inventory clerk, cashier, utility men, security guards, and delivery men will be the

employees. The partners have the right to control and direct the employees, not only as to the result in

accomplishing the work but also as to the details and means by which the result is accomplished.

b.WORKING HOURSThe working hours shall include all time during which an employee is required to be on duty at a

prescribed workplace and all time during which an employee is permitted to work. Hours of work will

be 8 hours a day. Rest periods or coffee breaks running from five to twenty minutes shall be considered

compensated work time. The time during which an employee is inactive by reasons of interruptions in

his works beyond his control shall be considered working time.

3.EMPLOYEE SALARY, PREMIUM COMPENSATION AND BENEFITSa.Salaries and Wages

Salaries of all employees are above the basic minimum wage in the City of Baguio. The salaries are paid

every fifteenth (15th) and thirtieth (30th) of the month.

b.13th MONTH PAYAll employees are entitled to a pay equivalent to one month of their basic pay. All thirteenth month pay

are non-taxable.

c.SSS/ Philhealth/ PAG-IBIG Contribution


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The amount of money given to the employees is net of SSS, Philhealth and PAG-IBIG which are then

remitted to the respective government agencies. All rates are based on the data provided by the three

government agencies

4.OTHER PREMIUM COMPENSATION AND BENEFITSa.Sick Leave

All employees are entitled to four (4) days sick leave with pay for every six (6) months of service. Sick

Leaves not availed can be converted into cash payment. Sick leave Policy is in compliance with the

Labor Code of the Philippines.

b.Holiday/Rest day/Overtime/Night Shift differentialAll premiums will be computed in accordance with the Labor Code of the Philippines.

c.Maternity LeaveAll female employees are entitled to receive a maternity benefit equivalent to 100% of her monthly

basic pay. The Labor Code of the Philippines states that a sixty (60) days equivalent salary must be given

for normal delivery or seventy-eight (78) days for caesarian section delivery.

d.Paternity LeaveAll male employees are entitled to a seven day leave with full pay. This leave shall be granted before,

during or after birth or after miscarriage by his legal spouse. The paternity leave with pay is granted for

four deliveries only, including miscarriage. Paternity Leave is not convertible to cash.

e.Separation PayAll employees are entitled to a separation pay if the termination of employment is for authorized cause

as provided by law.

LEGAL REQUIREMENTS

Procedure in the registration of partnership:

1.Verify and reserve the proposed partnership name. After paying the registration fee, the partnershipwill get a Name Verification Slip, which is submitted together with the other requirements.

2.Prepare the Articles of Partnership.3.File the complete documents with the SEC upon payment of the requisite filing fees.4.Acquire business name registration certificate at the Department of Trade and Industry.5.Proceed to the local municipality where the business is located to acquire business permit (1/2 of 1% of

invested capital).

6.After acquiring business permit, proceed to the Bureau of Internal Revenue to have a Tax IdentificationNumber (TIN).

7.After the BIR process, get hold a Social Security System (SSS), Philheath and Pagibig Certificate.


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8. Project ScheduleActivity Period

Feasibility Study 5 months

Procurements of funds 1 month

Accomplishment of legal requirements 1 month

Construction of building 10 months

Purchased of equipments 1 month and 2 weeks

Installation and testing of equipments 2 weeks

Hiring & training of employees 1 month

Installation of accounting system & purchase of materials 2 weeks

Start of Operation Jan 2013

2011 2012 201

Activities Aug Sept Oct Nov Dec Jan Feb Mar April May June July Aug Sept Oct Nov Dec Jan

Feasibility study

Acquisition of funds

Accomplishment of legal

requirements

Construction of Building A

Purchased of Equipments

Installation of Equipments

Hiring & training of employees

Installation of accounting system &

purchase of materials

Start of Operation

To start this business, we first study if this business is feasible after which we decided to contribute funds and loan for us to have a capital. Then next is, to

obtain all the legal requirements needed to operate the business. The purchasing of equipment is simultaneously done together with the construction of

building. Since setting-up the business will be done on December 2012, the projected start of the operation of the business is on January 2013.


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FINANCIALSTUDY


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FINANCIAL STUDY

I.Major AssumptionsProduction Capacity and Volume

MONTAVUERDE would be operating for 300 production days or 2,400 hours yearly. The normal capacity

for the first year of operations is 3,600 stone pavers each day. The production volume will be consistent

for the first 5 years of operations.

Sales

For the first year of operations, the company is still establishing its name to the market so its sales would

only be 70% of total production. For the succeeding years, the company will be known already to the

market so the sales will increased by 5%.

The total sales after sales return and allowances are set at 2% of the total gross sales. There would be an

annual increase of P1.50 in the selling price per year.

This increase is based on the estimates of the dealers on their purchase of stone pavers since they do not

want to provide contact information of the manufacturer where they purchased their stone pavers.

Petty cash fund

Petty cash fund will be assumed to be P5,000 and imprest fund system will be used.

Credit Terms

The company allows one (1) month credit term to its customers. It will also give 2% sales discount for first

10 days after the sale to customers to speed up the collection of receivables.

Allowance for Bad Debt

Allowance for bad debt is set at 10% of the outstanding accounts receivable based on the experience of

the First Premiere Finishing Centre on their sales of stone pavers to contractors. This was used as the

basis since the said dealer does not want to provide us the contact information of the manufacturer

where they purchased their stone pavers.

Collection Policy

The researchers assumed 90% of the total credit sales can be collected every year.

Price Level Changes

As provided by NSO, the proponents made used of 3.9% average inflation rate per commodity prevailing

in CAR in 2012 in computing the costs and expenses incurred by the company.


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Value Added Tax

The amount presented in the face of the financial statements would be net of Output (Input) Tax. The

Value Added Tax payable is computed as the difference between the Output Tax and the Input Tax, and is

assumed to be payable every quarter.

Accounts Payable

Accounts payable is assumed to be equal to the purchases of direct materials on the month of December.

Inventory End

The inventory end for the first three years of operations is assumed to be 30% of the production. For the

next years, it will decrease by 5%. These are the goods that are not included or scheduled for delivery

during the month.

Raw Material Inventory

Ending inventory for raw materials for the first year shall be equal to ten (10) days requirement for the

following year. For the succeeding years, the inflation rate of 3.9% shall be applied in coming up with the

cost. No work in process inventory shall be maintained since the cement-sand-water mixture will be

hardened if left unprocessed.

Depreciation

The company employs straight line method of depreciating the machineries and equipment.

Salaries Expense

It is assumed that salaries of employees will increase by 5% every two years.

Utilities Expense

Utilities comprises of electricity, water, and communication expense. The electricity expense and water

expense will be divided: 30% for Administrative Building and 70% for Production Building.

Communication expense is an expense of the Admininistrative Building. The increase per year for utilities

expense will be the inflation rate of 3.9%.

Supplies expense

The price of the supplies will be assumed to increase by 3.9% inflation rate annually.


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Property, Plant and Equipment

The cost of the machineries and equipment would be treated as capitalized expense in which the

acquisition cost is more than P5,000. The depreciation method of the equipment would be straight line

method.

Benefits to Employees

The partnership provides the benefit to its employees such as SSS, and PAGIBIG. They are deducted from

the gross salaries of employees based on the contribution schedule provided by the said agencies. 13th

Month Pay will be provided to all employees annually.

Income Tax

Thirty percent (30%) tax rate will be used as a basis in computing the income tax of the company.

Organizational Costs

Every business establishments are indeed required to register from Securities and Exchange Commission,

Department of Trade and Industry, Bureau of Internal Revenue, the Local Municipality.

Maintenance

Maintenance expense for equipment and machineries will be provided by CMC Machineries. It shall be

at 1% of the cost and will increase 3.9% inflation rate for the succeeding years based on the computed

expense for the first year. This was derived from the DOST estimation.

Withdrawals

Each partner will be allowed to withdraw 10% of net income for the year.

Equity

The partners will be investing an initial amount of P 2,500,000 each.

II. Total Project Costs

Total Project Cost

Unit cost Quantity Total costs

Land (P3,500/sq.m. x 1,200 sq.m.)* P 4,200,000.00 1 P 4,200,000.00 P 4,200,000.0

Building

Admin Building (Bldg A)** 1,525,000.00

Production Building (Bldg B)** 3,055,000.00 4,580,000.0


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Machineries

Hydraulic concrete mixer 90,000.00 2 180,000.00

Plastic Shredder 350,000.00 1 350,000.00

Auto Paver Making Machine BW-119 400,000.00 1 400,000.00

Hinged Steel Belt Conveyor (set) 200,000.00 2 400,000.00 1,330,000.0

Factory Tools and EquipmentIndustrial Weighing Scale 4,000.00 1 4,000.00

Chapin 4gal Commercial Backpack Sprayer 1,500.00 1 1,500.00

Fire Extinguisher 999.75 2 1,999.50

Exhaust Fan 1,179.75 4 4,719.00

Floor polisher 23,649.75 1 23,649.75

Wheel barrow 1,850.00 2 3,700.00

Water Hose 1,159.75 2 2,319.50

Push Carts 1,350.00 1 1,350.00

Factory Suit 589.75 4 2,359.00 45,596.7

Delivery Equipment

Isuzu Delivery Truck 250,000.00 2 500,000.00 500,000.0

Office Equipments

Computer 18,000.00 2 36,000.00

Telephone w/ fax 4,480.00 1 4,480.00

Wall clock 209.00 1 209.00

Calculator (14D Calcu 2way) 680.00 3 2,040.00

Printer 2,300.00 1 2,300.00

Trash can 1,349.75 1 2,749.75

Magazine Box open 138.50 3 415.50

White Board (36x24) 820.00 1 820.00

Cork Board (2X3WW) 465.00 1 465.00

Scissors 50.25 2 100.50

Stapler 196.50 2 393.00

Puncher 235.00 1 235.00 50,207.7

Office Furniture and Fixtures

Office table 2,000.00 4 8,000.00

Chairs 550.00 4 2,200.00

Filing cabinets 3,000.00 2 6,000.00

Cash Box 1,599.75 1 1,599.75 17,799.7

Factory Furniture and Fixtures

Monoblock chairs 300.00 4 1,200.00

Table 2,000.00 1 2,000.00 3,200.0

Production cost (first 3 months)***(4,459,773.83/300 days) x 75

days1,114,943.4

Factory Supplies (for 3 months)

Plantex All-in-One Solution Odor Eliminator 640.00 1 640.00

Creston Dust Masks 19.75 4 118.50

Creston Gloves 54.75 4 328.50 1,087.0

Total Factory Supplies

Office Supplies (for 3 months)

Vouchers 51.25 6 307.50


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Official Receipts 47.75 3 143.25

Delivery Receipt 40.00 3 120.00

Receiving Report 64.75 3 194.25

Long and short coupon bond 360.00 2 720.00

White board Marker 42.50 1 42.50

Ballpens (set-3) 10.50 3 31.50 1,559.0

Selling and Administrative Salary expense (279,500/300days) x 75 days 69,875.0

Communication expense (27,500/300 days) x 75 days 6,875.0

Advertising expense (35,000/300 days) x 75 days 8,750.0

Security Expense (15,000/300 days) x 75 days 3,750.0

Taxes and Licenses

Filing fee with SEC 26,000.00

DTI Registration 500.00

BIR registration 500.00

Business permit 66,125.00

LTO registration 1,400.00Notary public 500.00 95,025.0

Total Project Costs 12,028,668.7

*Based on Seller's Price

**Based on City Buildings & Architecture Office (CBAO) Estimation

***Refer to Production cost (Schedule B)

III.Source of FinancingAny business would adopt several financing sources such as loans and personal investments, in

order to start with their respective operations. Current inquiries into the lending practices of the banks

require a business to have at least three year operations which therefore eliminates this option of

financing this startup business.

Each partner will invest an amount of P 2,500,000.00 for initial contribution. This P 2,500,000 comes from

the partners inheritance, personal loan, individual income, and savings. The personal loan will be at the

risk of the partner and not of the partnership. The partners are confident to invest this big amount

because they believe that this business will become profitable in the future. They are certain that this

business will return their investments after profitable years of operation.


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IV. PRO-FORMA FINANCIAL STATEMENTS

MONTAVUERDE

PROJECTED STATEMENT OF FINANCIAL OPERATION

For the years ended December 31, 2013, 2014, 2015, 2016, and 2017

(In Philippine Peso)

Schedule 2013 2014 2015 2016 2017

Net Sales A 4,536,000.00 6,024,375.00 7,560,000.00 9,237,375.00 11,056,500.00

Cost of Goods Sold C 3,121,841.68 4,543,610.22 5,124,404.69 5,373,738.22 5,741,790.71

Gross Profit 1,414,158.32 1,480,764.78 2,435,595.31 3,863,636.78 5,314,709.29

Operating Expenses:

Selling and Administrative Expenses D 710,498.83 693,393.02 756,452.13 781,437.22 850,424.19

Net Income from Operations 703,659.49 787,371.76 1,679,143.18 3,082,199.57 4,464,285.10

Other Income 0 0 0 0 0

Net Income before Tax 703,659.49 787,371.76 1,679,143.18 3,082,199.57 4,464,285.10

Less: Income Tax expense 211,097.85 236,211.53 503,742.95 924,659.87 1,339,285.53

Net Income after Tax 492,561.64 551,160.23 1,175,400.23 2,157,539.70 3,124,999.57


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MONTAVUERDE

PROJECTED STATEMENT OF FINANCIAL POSITION

As of December 31, 2013, 2014, 2015, 2016, and 2017


ASSETS Schedule 2013 2014 2015 2016 2017

Current Assets

Cash (note 1) 1,275,468.32 1,317,732.20 2,073,443.52 3,404,572.07 5,139,917.89

Accounts Receivables R 244,944.00 545,765.85 899,429.27 1,308,304.59 1,774,525.13

Inventory C 1,337,932.15 1,514,536.74 1,281,101.17 948,306.74 637,976.75

Total Current Asset 2,858,344.46 3,378,034.79 4,253,973.96 5,661,183.40 7,552,419.77

Non-Current Assets

Property, Plant, Equipment I 10,306,723.08 10,115,227.85 9,923,732.63 9,732,237.40 9,540,742.18

Furniture and Fixtures J 16,499.82 14,249.86 11,999.90 9,749.94 7,499.98

Total Non-Current Assets 10,323,222.90 10,129,477.71 9,935,732.52 9,741,987.34 9,548,242.15

TOTAL ASSETS 13,181,567.36 13,507,512.50 14,189,706.48 15,403,170.74 17,100,661.92

LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities

Accounts Payable S 321,107.50 332,667.37 344,643.40 357,050.56 369,904.38

Accrued Utilities Payable T 13,766.67 14,042.00 14,322.84 14,609.30 14,901.48

Income Tax Payable U 52,774.46 59,052.88 125,935.74 231,164.97 334,821.38

VAT Payable V 27,938.35 60,189.75 75,543.90 92,315.46 110,504.44

SSS Payable X 10,695.40 10,695.40 10,695.40 10,695.40 10,695.40

Philhealth Payable X 2,175.00 2,175.00 2,175.00 2,175.00 2,175.00

PAG-IBIG Payable X 2,700.00 2,700.00 2,700.00 2,700.00 2,700.00

Withholding Tax Payable X 4,129.16 4,129.16 4,129.16 4,129.16 4,129.16

Total Current Liabilities 435,286.54 485,651.57 580,145.43 714,839.84 849,831.24

Equity

Guiawan, Capital 2,549,256.16 2,604,372.19 2,721,912.21 2,937,666.18 3,250,166.14

Monsales, Capital 2,549,256.16 2,604,372.19 2,721,912.21 2,937,666.18 3,250,166.14

Novida, Capital 2,549,256.16 2,604,372.19 2,721,912.21 2,937,666.18 3,250,166.14

Peralta, Capital 2,549,256.16 2,604,372.19 2,721,912.21 2,937,666.18 3,250,166.14

Unciano, Capital 2,549,256.16 2,604,372.19 2,721,912.21 2,937,666.18 3,250,166.14

Total Equity 12,746,280.82 13,021,860.94 13,609,561.05 14,688,330.90 16,250,830.68

Total Liabilities and Equity 13,181,567.36 13,507,512.50 14,189,706.48 15,403,170.74 17,100,661.92

Note 1: Under Cashflow Statement


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MONTAVUERDE

PROJECTED STATEMENT OF CHANGES IN EQUITY



2013

Guiawan Monsales Novida Peralta Unciano Total

Initial Investment 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 12,500,000

Share in Net Income 98,512.33 98,512.33 98,512.33 98,512.33 98,512.33 492,561

Total 2,598,512.33 2,598,512.33 2,598,512.33 2,598,512.33 2,598,512.33 12,992,561

Withdrawals 49,256.16 49,256.16 49,256.16 49,256.16 49,256.16 246,280

Ending Capital Balances 2,549,256.16 2,549,256.16 2,549,256.16 2,549,256.16 2,549,256.16 12,746,280

2014


Beginning Capital Balance 2,549,256.16 2,549,256.16 2,549,256.16 2,549,256.16 2,549,256.16 12,746,280

Share in Net Income 110,232.05 110,232.05 110,232.05 110,232.05 110,232.05 551,160

Total 2,659,488.21 2,659,488.21 2,659,488.21 2,659,488.21 2,659,488.21 13,297,441

Withdrawals 55,116.02 55,116.02 55,116.02 55,116.02 55,116.02 275,580


2015



Share in Net Income 235,080.05 235,080.05 235,080.05 235,080.05 235,080.05 1,175,400

Total 2,839,452.23 2,839,452.23 2,839,452.23 2,839,452.23 2,839,452.23 14,197,261

Withdrawals 117,540.02 117,540.02 117,540.02 117,540.02 117,540.02 587,700


2016Guiawan Monsales Novida Peralta Unciano Total



Total 3,153,420.15 3,153,420.15 3,153,420.15 3,153,420.15 3,153,420.15 15,767,100

Withdrawals 215,753.97 215,753.97 215,753.97 215,753.97 215,753.97 1,078,769


2017




Total 3,562,666.09 3,562,666.09 3,562,666.09 3,562,666.09 3,562,666.09 17,813,330

Withdrawals 312,499.96 312,499.96 312,499.96 312,499.96 312,499.96 1,562,499



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MONTAVUERDE

PROJECTED STATEMENT OF CASH FLOWS



2013 2014 2015 2016 2017

Operating

Net Icome 492,561.64 551,160.23 1,175,400.23 2,157,539.70 3,124,999.57

Increase in Receivable (244,944.00) (300,821.85) (353,663.42) (408,875.32) (466,220.54)

Increase(decrease) in Inventory (1,337,932.15) (176,604.59) 233,435.57 332,794.43 310,330.00

Depreciation 193,745.19 193,745.19 193,745.19 193,745.19 193,745.19

Increase in Accounts Payable 321,107.50 11,559.87 11,976.03 12,407.16 12,853.82

Income Tax Payable 52,774.46 6,278.42 66,882.86 105,229.23 103,656.41

VAT Payable 27,938.35 32,251.40 15,354.14 16,771.56 18,188.98

SSS Payable 10,695.40 - - - -

Philhealth Payable 2,175.00 - - - -

PAG-IBIG Payable 2,700.00 - - - -

Withholding Tax Payable 4,129.16 - - - -

Increase(decrease) in Accrued Payables 13,766.67 275.33 280.84 286.46 292.19

Total (461,282.78) 317,844.00 1,343,411.43 2,409,898.40 3,297,845.61

Investing

Purchase of PPE (10,498,218.30) - - - -

Purchase of Furniture and Fixtures (18,749.78) - - - -

Total (10,516,968.08) - - - -

Financing

Initial Investment 12,500,000.00 - - - -

Withdrawals (246,280.82) (275,580.11) (587,700.11) (1,078,769.85) (1,562,499.78)

Total 12,253,719.18 (275,580.11) (587,700.11) (1,078,769.85) (1,562,499.78)

Net Cash Flow 1,275,468.32 42,263.88 755,711.32 1,331,128.55 1,735,345.82

Add: Cash Beginning - 1,275,468.32 1,317,732.20 2,073,443.52 3,404,572.07

Cash Ending 1,275,468.32 1,317,732.20 2,073,443.52 3,404,572.07 5,139,917.89

Note: Refer to Balance Sheet

For investing activities, refer to PPE (Schedule I)


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MONTAVUERDE

FIVE YEARS PROJECTED SALES

SCHEDULE A

2013 2014 2015 2016 2017

Total Sales 5,292,000.00 6,885,000.00 8,640,000.00 10,557,000.00 12,636,000.00

Less Sales Return and Allowances 105,840.00 137,700.00 172,800.00 211,140.00 252,720.00

Output Tax 544,320.00 722,925.00 907,200.00 1,108,485.00 1,326,780.00

Net Sales 4,536,000.00 6,024,375.00 7,560,000.00 9,237,375.00 11,056,500.00Cash Sales (Note 1) 3,175,200.00 4,217,062.50 5,292,000.00 6,466,162.50 7,739,550.00

Credit Sales (Note 2) 1,360,800.00 1,807,312.50 2,268,000.00 2,771,212.50 3,316,950.00

Note 1: 70% of Total net sales

Note 2: 30% of Total net sales

MONTAVUERDE

FIVE YEAR PROJECTED SALES SUMMARY

SCHEDULE A.1

Year SalesProduction per

day (a)

Operating days

in a year (b)

Annual

Production (axb)Units Sold Price Gross Sales

Sales

ReturnTotal Sales Output tax Net Sale

2013 3,600 300 1,080,000.00 756,000.00 7.00 5,292,000.00 105,840.00 5,080,320.00 544,320.00 4,536,000

2014 3,600 300 1,080,000.00 810,000.00 8.50 6,885,000.00 137,700.00 6,747,300.00 722,925.00 6,024,375

2015 3,600 300 1,080,000.00 864,000.00 10.00 8,640,000.00 172,800.00 8,467,200.00 907,200.00 7,560,000

2016 3,600 300 1,080,000.00 918,000.00 11.50 10,557,000.00 211,140.00 10,345,860.00 1,108,485.00 9,237,375

2017 3,600 300 1,080,000.00 972,000.00 13.00 12,636,000.00 252,720.00 12,383,280.00 1,326,780.00 11,056,50

Total 44,010,000.00 880,200.00 43,023,960.00 4,609,710.00 38,414,250


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MONTAVUERDE

PRODUCTION COST

SCHEDULE B

Direct Materials 2013 2014 2015 2016 2017Raw Materials, beginning - 125,433.60 130,325.51 135,408.21 140,68

Purchases (Schedule E) 3,763,008.00 3,898,476.29 4,038,821.43 4,184,219.01 4,334,85

Available for used 3,763,008.00 4,023,909.89 4,169,146.94 4,319,627.21 4,475,54

Raw materials, end (Schedule F) 125,433.60 130,325.51 135,408.21 140,689.13 146,17

Direct materials used 3,637,574.40 3,893,584.38 4,033,738.74 4,178,938.09 4,329,36

Direct labor (Schedule K) 325,000.00 325,000.00 341,250.00 341,250.00 537,47

Factory Overhead

Employer's contribution (Schedule L) 55,803.36 55,803.36 55,803.36 55,803.36 55,80

Indirect labor (Schedule K) 195,000.00 195,000.00 204,750.00 204,750.00 243,65

Utilities (Schedule M) 98,840.00 102,587.03 106,476.32 110,513.27 114,70

Factory Supplies Expense (Schedule G) 3,037.95 3,156.43 3,279.53 3,407.43 3,54

Depreciation Factory Equipment (Schedule I.1) 129,503.84 129,503.84 129,503.84 129,503.84 129,50

Depreciation Factory Furniture and Fixtures

(Schedule J)514.29 514.29 514.29 514.29 514

Maintenance - Machinery and Equiment (Schedule O) 14,500.00 15,065.50 15,653.05 16,263.52 16,89

Total Production Cost 4,459,773.83 4,720,214.82 4,890,969.12 5,040,943.79 5,431,460


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MONTAVUERDE

FIVE YEARS PROJECTED COST OF GOODS SOLD

SCHEDULE C

Direct Materials 2013 2014 2015 2016 2017

Raw Materials, Beginning 0.00 125,433.60 130,325.51 135,408.21 140,689

Purchase (Schedule E) 3,763,008.00 3,898,476.29 4,038,821.43 4,184,219.01 4,334,850

Available for used 3,763,008.00 4,023,909.89 4,169,146.94 4,319,627.21 4,475,540

Raw Materials, End (Schedule F) 125,433.60 130,325.51 135,408.21 140,689.13 146,176

Direct Materials Used 3,637,574.40 3,893,584.38 4,033,738.74 4,178,938.09 4,329,364

Direct Labor (Schedule K) 325,000.00 325,000.00 341,250.00 341,250.00 537,478

Factory Overhead

Employer's Contribution (Schedule L) 55,803.36 55,803.36 55,803.36 55,803.36 55,803

Indirect Labor (Schedule K) 195,000.00 195,000.00 204,750.00 204,750.00 243,65

Utilities (Schedule M) 98,840.00 102,587.03 106,476.32 110,513.27 114,703

Factory supplies expense (Schedule G) 3,037.95 3,156.43 3,279.53 3,407.43 3,540

Depreciation Factory Equipment (Schedule I.1) 129,503.84 129,503.84 129,503.84 129,503.84 129,503

Depreciation Factory Furniture and Fixtures (Schedule J) 514.29 514.29 514.29 514.29 514

Maintenance - Machinery and Equiment (Schedule O) 14,500.00 15,065.50 15,653.05 16,263.52 16,897

Manufacturing Cost 4,459,773.83 4,720,214.82 4,890,969.12 5,040,943.79 5,431,460

Work-in-Process, Beginning 0.00 0.00 0.00 0.00 0

Cost of Goods put into Process 4,459,773.83 4,720,214.82 4,890,969.12 5,040,943.79 5,431,460

Work-in -process, End 0.00 0.00 0.00 0.00 0

Cost of Goods Manufactured 4,459,773.83 4,720,214.82 4,890,969.12 5,040,943.79 5,431,46

Finished Goods, Beginning 1,337,932.15 1,514,536.74 1,281,101.17 948,306

Cost of Goods Available for Sale 4,459,773.83 6,058,146.97 6,405,505.86 6,322,044.96 6,379,76

Finished Goods, End 1,337,932.15 1,514,536.74 1,281,101.17 948,306.74 637,976

Cost of Goods Sold 3,121,841.68 4,543,610.22 5,124,404.69 5,373,738.22 5,741,790


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MONTAVUERDE

FIVE YEARS PROJECTED SELLING AND ADMINISTRATIVE EXPENSE

SCHEDULE D

2013 2014 2015 2016 2017

Salary Expenses (Schedule K) 279,500.00 279,500.00 293,475.00 293,475.00 308,148.88

Employer's Contribution (Schedule L) 28011.84 54776.64 54776.64 54776.64 54776.64

Office Supplies Expense (Schedule H) 2,158.93 2,243.13 2,330.61 2,421.50 2,515.94

Depreciation-PPE (Schedule I1) 61,991.39 61,991.39 61,991.39 61,991.39 61,991.39

Depreciation-Furniture and Fixtures (Schedule J) 1,735.67 1,735.67 1,735.67 1,735.67 1,735.67

Utilities Expense (Schedule M) 164,860.00 171,289.54 177,969.83 184,910.66 192,122.17

Taxes and Licenses Expense (Schedule N) 95,025.00 36,482.00 43,685.00 47,190.00 52,551.00

Advertising Expense (Schedule P) 35,000.00 36,365.00 37,783.24 39,256.78 40,787.80

Security Expense (Schedule Q) 15,000.00 15,585.00 16,192.82 16,824.33 17,480.48

Bad Debt Expense (Schedule R.2) 27,216.00 33,424.65 66,511.94 78,855.24 118,314.22

Total 710,498.83 693,393.02 756,452.13 781,437.22 850,424.19

MONTAVUERDE

FIVE YEARS PROJECTED RAW MATERIALS PURCHASESSCHEDULE E

2013 2014 2015 2016 2017

Raw Materials used in production 3,637,574.40 3,893,584.38 4,033,738.74 4,178,938.09 4,329,364.01

Raw Materials, End 125,433.60 130,325.51 135,408.21 140,689.13 146,176.00

Total 3,763,008.00 4,023,909.89 4,169,146.94 4,319,627.21 4,475,540.02

Less: Raw Materials, Beginning 0.00 125,433.60 130,325.51 135,408.21 140,689.13

Raw Material Purchases 3,763,008.00 3,898,476.29 4,038,821.43 4,184,219.01 4,334,850.89


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MONTAVUERDE

RAW MATERIALS (BREAKDOWN)

SCHEDULE E.1

Raw Materials Units (a)Quantity per cycle

(b)

Production cycle per

day ( c )

(d) (e)

Annual QuantityQuantity per day

(a x b x c)

Annual Operating

days

Plastic Bags 6 kilos 4 8 192 kilos 300 192Plastic Bottles 4 kilos 4 8 128 kilos 300 128

Cement 1.5 bags 4 8 48 bags 300 48

Fine sand 5 cubic feet 4 8 160 cubic feet 300 160

Total Raw Materials 528

MONTAVUERDE

FIVE YEARS PROJECTED RAW MATERIALS, ENDING

SCHEDULE F

Raw Materials Cost per unit (a) Quantity per day (b) Days after the annual period Total cost (a x b x c)

Plastic Bags 2.83 192 kilos 10 5,433.60

Plastic Bottles 20 128 kilos 10 25,600.00

Cement 140 48 bags 10 67,200.00

Fine sand 17 160 cubic feet 10 27,200.00Total cost of Raw Materials ending for year 1 125,433.60

Multiply by annual Inflation rate (3.9%) 103.90%

Total cost of Raw Materials ending for year 2 130,325.51






Total cost of Raw Materials ending