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 |
Qty/ |
Prod |
Prod cost/ |
Prod cost/ |
Direct Costs |
||||||
Rolls of yarn |
Rolls |
0.7 |
254 |
178 |
4,623 |
55,474 |
Rolls |
0.45 |
35 |
16 |
410 |
4,914 |
|
Packaging |
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/ |
Qty/yr |
Unit |
Prod |
Unit |
Total revenue |
Woolen |
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 |