KNITTING OF WOOLEN KNITWEAR

Introduction

Woolen knitted products are highly demanded especially by institutions such as: schools, companies and for individual usage. The business idea is aimed at establishing a woolen kitting project with minimum fixed capital of 18,302US dollars, producing an average of sixty woolen knitwear products per day totaling to18,720 pieces fetching a revenue of,680US$ when sold in the first year of operation. The operating costs are 99,601US$.


Production Capacity, Technology & Process
The production process involves winding yarn and then knitted in different fashions as the operator desires. The product is combined together by a sewing machine and then packed. The production capacity largely depends on the nature of the machines used, the efficiency and experience of the workers, and the desired objectives of the project.

 

 Market Analysis
The market for woolen products exists with major consumers such as: education institutions, medical institutions, fashion shops and individuals buying.


Investment Scale, Capital Requirements and Equipment
The capital requirements largely depend on the investment scale and equipment to be used but the table below shows the knitting equipment that can be used.
Capital Investment Requirements in US $

Capital investment item

units

Qty

unit cost

Total

Knitting machine

No

2

7,000

14,000

Sewing machine

No

2

250

500

Furniture

No

-

-

2,500

Scissors

No

10

15

150

Measuring tapes

No

12

6

72

Steam Iron

No

2

40

80

Other Equipment

No

-

-

1,000

Total




18,302

 

Production and Operating Costs in US$
1) Production costs assumed are for 312 days per year with daily capacity of knitting 60 pieces of woolen knitwear.
2) Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
3) Direct costs include: materials, supplies and other costs that directly go into production of the product.
4) Total monthly days assumed are 26-work days.
5) The valuation currency used is United States Dollars

Direct Materials Supplies and Costs

Cost Item

Units

Unit
cost

Qty/
day

Prod
cost/da
y

Prod cost/
month

Prod cost/
yr

Direct Costs







Rolls of yarn

Rolls

0.7

254

178

4,623

55,474

Rolls

0.45

35

16

410

4,914


Packaging
materials

Pcs

0.075

64

5

125

1,498

Sub-total

353

198

5,157

61,885



General Costs(Overheads)







Labor

954

11,450





Utilities

346

4,150





Selling and distribution

187

2,240





Miscellaneous expenses

88

1,050





Administration expenses

188

2,250





Rent

1,000

12,000





Depreciation

381

4,576





Sub-total

3,143

37,716





Total Operating Costs

8,300

99,601







Project Product Costs and Price Structure

Item

Qty/
day

Qty/yr

Unit
Cost

Prod
cost/yr

Unit
price

Total revenue

Woolen
Knitwear

60

18,720

5.32

99,601

6.5

121,680

 

Profitability Analysis Table

Profitability Item

Per Day

Per Month

Per Year

Revenue

390

10,140

121,680

Less: Prod &Operating Costs

319

8,300

99,601

Profit

71

1,840

22,079