V.

FINANCE ASPECT

This chapter shows the cost of the proposed project and the sources of
financing. This also interprets the financial statements, which include statement of
comprehensive income, statement of financial position, statement of partner’s equity
and cash flow statements.

1. GENERAL ASSUMPTIONS INCLUDING PROJECT COST AND GANTT

CHART

1. The maximum annual capacity is ???? packs of 100g mushroom chicharons.

2. Annual production will increase 20% annually.
3. Depreciation is computed on straight-line basis.
4. All factory workers have spontaneous productions throughout the year.
5. The company hours will be from 8:00am - 12:00nn and will resume at 1:00pm
- 5:00pm which is 8 hours/day, Monday to Saturday.
6. In terms of leasing agreement, the depreciation of the building and its property
tax will be paid by the owner and not the leasee.
7. Rent expense will be allocated based on space allotment.
2. SPECIFIC ASSUMPTIONS ON COST OF GOODS SOLD ACCOUNTS

Raw materials will be purchased from local suppliers and price of raw materials and
indirect materials is expected to increase by 5% annually.
Direct raw materials will be restocked every three months. While indirect raw
materials will be replenished monthly direct raw materials end will be 10% of
available raw materials.
There will be no work in process inventory.
Finished goods at year end will be 5% of of total goods available for sale.
Direct and indirect labor labor will increase 5% annually.
Factory Overhead expense
a. Electricity Expense-….
b. Depreciation is allocated based on purpose and usage of the asset.
c. Repair and maintenance will be 5% of the total cost of machinery and
transportation vehicle. It is expected to increase 5% annually.
d. Water expense is www cubic meter per month. It is expected to
increase 10% annually. It is allocated based on ?????
e. Factory supplies is expected to increase by 10% annually, restocked
monthly and will have a 10% ending balance annually.
f. Gas, oil and lubricants will increase 10% annually.

3. SPECIFIC ASSUMPTIONS FOR SELLING AND ADMINISTRATIVE

ACCOUNTS
Sales and purchases are inclusive of Value Added Tax and the cost of vegetables
is tax exempt.
The price of mushroom chicharon will be based on incremental cost plus mark up.
Incremental cost of mushroom chicharon includes Direct Material, Direct Labor, and
Variable and Fixed Factor Overhead expenses.
1. Operating expense are the following:
a. Advertising expense is expected to increase 5% annually.
b. Sales supplies is expected to increase 5% annually and will have 20%
ending balance annually.
c. Office supplies is expected to increase 5% annually and will have 20%
ending balance annually.
 d. Telephone expense will be P1,099 monthly plan with internet connection
and will increase …. annually. It will be equally allocated to selling and
Administrative.
e. SSS, Philhealth and Pag-ibig Contributions is based on the table…… and
will be based on monthly salaries and wages. (kelan due)
f. Taxes and licenses are expected to increase based on City Hall table.
g.

a. Partner’s salary is P5,000 monthly.

b. Fixed assets has no salvage value and estimated useful life as follows:

 Machineries 10 years

 Equipment 10 years

 Leasehold Improvement 5 years

 Delivery Vehicle 10 years

 Furniture and Fixtures 10 years

1. Income tax rate is 30%. (TRAIN)

2. All working employees will be paid every 15th and 30th day of the month. (Every 3 years ang

increase)

4. PROJECTED FINANCIAL STATEMENTS

(excel pa)

5. SOURCES OF FINANCING
6. PROJECT EVALUATION