4.

3 cost estimation
I. List of Fixed Assets Needed and Their Cost
No Item Quantity Unit Total
price price
1. Center punch 1 20 20birr
2. Scriber 1 30 30 birr
3. Forging hammer 1 80 80 birr
4. Try square 1 50 50 birr
5. Divider 1 60 60 birr
6. Venire caliper 1 600 600 birr
7. Steel ruler 1 50 50 birr
8. meter 1 90 90 birr
9. Plastic hammer 1 60 60 birr
10. Welding machine 1 12500 12500
11. Grinding machine 1 5000 5000
12. Drilling machine 1 5000 5000
Total cost 23540
Table 1 List of Fixed Assets
II. List of raw material needed/BOM
No
Part name Description unit  Qty. Unit cost Total cost Rrk
.
1 Sheet metal 2000*1000*3mm Pcs 1  
5,000.00 5,000.00
2 Sheet metal 2000*1000*5mm Pcs 1  
5,000.00 5,000.00
3 RHS 50*50*6000*3mm Pcs 2  
2,500.00 5,000.00
4 RHS 40*40*6000*3mm Pcs 2  
2,500.00 5,000.00
5 Angle iron 30*30*6000*5mm Pcs 2  
1,500.00 3,000.00
6 AC Motor Three phase 5.5Hp 2850 rpm Pcs 1  
30,000.00 30,000.00
7 Contactor Telemechanic, 220V Pcs 1  
400.00 400.00
8 Overload relay Telemechanic, 220V Pcs 1  
400.00 400.00
9 Start push button Telemechanic, Normally open Pcs 1  
100.00 100.00
10 Indicating lamp Red ,green, yellow Pcs 3  
50.00 150.00
11 Electric cable 3*1*4mm2 Meter 10  
300.00 3,000.00
12 Stop push button Telemechanic, Normally close Pcs 1  
 80.00 80.00
13 Electrode Dia 2.5 permanent Pct 5  
600.00 3,000.00
14 Electrode Dia 3.2 permanent Pct 5  
800.00 4,000.00
15 Metal Paint Nifas silk Gallon 3  
600.00 1,800.00
16 Anti-rust Nifas silk Gallon 3  
1,200.00 1,800.00
17 UCP bearing rectangular Germany 4 holes pcs 2  
3,000.00 6,000.00
18 sieve Different size meter 4  
100.00 400.00
M10-
19 bolt and nut Different size m10-m30 10  
M30 50.00 500.00
20 pully almunium 3 grove pcs 2  
1,500.00 3,000.00
21 V-belt A-type pcs 2  
800.00 1,600.00
mild steel round
22 Dia 40*1000mm meter 1  
bar 2,000.00 2,000.00
mild steel round
23 Dia 60*1000mm meter 1  
bar 3,000.00 3,000.00

     Total cost of material       84,230.0  

0

Table 2 List of raw material

III. Factory overhead expenses
No Overhead expenses Amount
per month
1. Electricity 100
2. Advertising 100
3. Telephone 100
4. Water 100
5. Maintenance 250
6. Depreciation of fixed 178
capital
7. Total factory overhead 828
per month

Table 3 Factory overhead expenses

I. Useful life time of each fixed asset
No Investment item Life span in Deprecation Investmen Total
years (%) t cost deprecation
 1 Buildings 20 5 ------ ---------
2 Simple machine 15-20 6-5 986 192.2
3 Hand tools 3 33.3 56 114
Total 306.2

Table 4 the useful life time of each fixed asset

II. Brief description capacity of the project per month

Month 1 2 3 4 5 6 7 8 9 10 11 12
No of products 1 8 7 10 10 20 9 15 15 8 12 17
Table 5Brief description capacity of the project per month
ORGANIZATION AND MANAGEMENT PLAN
Organizational structure

ORGANIZATIONAL STAFF COST

No Position Qualification Salary per Remark
month/BIRR
1. General manager MTM 10150
2. production manager MT 7071
3. Finance manager Accounting 4000
4. Production worker GMFA 3000
5. Purchaser Accounting L-4 3000
6. Secretary It 2500
Total staff cost 29721
 Table 6 Organizational Staff cost
ADMINISTRATIVE EXPENSES
No Administrative expenses Amount
1. Allowance 1000
2. Supplies 500
3. Communication 300
Total Administrative expenses 1800
Table 7 Administrative expenses
Calculation of the project cost
 Total material cost = 84,230.00 birr
 Direct labor cost= 29721birr
 Indirect cost = 1800birr
 Total machine cost = 2500
 Labor cost = Direct labor cost + indirect labor cost
= 29721birr +1800birr
= 31521 birr
 Overhead cost = 828 birr
Total production cost = Total material cost+ Overhead cost+ Labor
cost+ Material cost
= 84,230.00 birr+ 828 birr+ 31521+2500
birr
= 119,079.00 birr
Profit = Total production cost ×15%
= 119,079.00 birr × 15/100
= 17,861.85birr
Selling price = Total production cost+ Profit
= 119,079.00 birr + 17,861.85 birr
= 136,940.85 birr

FINANCIAL PLAN
Sources of funding
Type Source Conditions Amount
(duration
/interest)
Equity Own saving 25,000
capitals Partner 25,000
Loan 1 Credit cooperation 250,000
Government scheme
Bank loan
TOTAL FUNDING 300,000Birr
Table 8 Sources of funding
CAPITAL REQUIREMENT
Capital requirement( project cost ) Amount
Investment or Fixed Assets
Land Gov’t
Building Gov’t
Equipment( with machine) 30287.4
Others 1000
Total fixed Assets 31287.4
Working capital /operational costs of one month
Raw materials costs one month 50150
Administrative expenses 1800
Overhead expenses 828
Staff cost of one month 29721
Total working capital in one month 82499
Total Capital requirement 113786.4birr
Table 9 Capital requirement