Razl Pen Manufacturing Company
Content
EUW 224 Engineering Entrepreneurship “Razl Pen”
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1.0 Executive Summary
Razl Pen (M) Sdn Bhd was founded in early 2009 as an locally-based smart pen
manufacturer to help modern youths and working adults to cope with daily task and
at the same time, enjoy music. We have a proven strength of financial resources
coupled with collaboration with local as well as foreign stationery agents and
manufacturers. We are focused on expanding our business as well as fulfilling the
demands of modern society.
1.1 Objective of company
Achieve the sales target of at least RM250, 000 in a year and increase the
amount of revenues and profit by a staggering 50% in the next 2 fiscal years and
expand the product manufacturing across Asia and Middle-East.
1.2 Products and Services being offered
Products being offered by our current company are inclusive of a Pen which
carries the function of playing Mp3, voice/sound recording and timer; a headphone
set and an USB cable. Refill ink can be bought from the main branch or from the
agents all across Peninsular Malaysia. Services provided by us inclusive of the
repairing or compensation for pen which shows signs of mechanical problem,
money-back guarantee , a warranty of 2 years and a 7 days trial period.
1.3 Market potential
Based on the survey conducted by our market analysts, our manufactured
product deemed as in-demand because of the technology evolving from time to
time. The survey also showed that tech-savvy either students or working adults
closely monitoring such stationery set available in market. So, our target market
consists of students whose age ranging from 13-21 and working adults preferably
aged 24-35.
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1.4 Project cost
Project costs including the manufacturing of Razl Pen, headphone set, USB
cable and refill ink are estimated at RM 30,000 till date, with changes in raw
materials’ prices affecting the project costs from time-to-time basis. Other costs
include the purchasing of furniture, machineries, the maintenance of machineries,
utilities bill, workers salary, marketing costs and etc. Other owners’ costs consist
of owners’ administrative costs, legal/due diligence cost, permitting fees and
owners’ contingency. In addition, Design, testing & related costs are subjected to
change depending on the Research and Development (R&D) conducted by our
current mother-company.
1.5 Expected returns
Based on the figures and facts provided by the head company and its Research
and Development (R&D) Department, Financial Department & Marketing
Department, and the review of current economic situation, it is concluded that the
sales can hit 160 pens in its introductory month which will bring revenues of
approximately RM20, 000 with a profit margin of a staggering 92.3% excluding
the likes of promotion, discounts and early-bird rebate. So, the profit in the first
month can be seen stand at RM9, 600. And the sales are expected to grow by
approximately 20 % a month with a lower profit margin considering the promotion
which will be done by the marketing department. Profit margin can be seen
maintained throughout the introductory year .And it is confirmed by the financial
department that the sales will easily cope with the expenses generated by the
manufacturing of the pen.
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2.0 Main body of the Business Plan
2.1 INTRODUCTION
Name of the company : RAZL PEN (M) Sdn Bhd
Nature of business : Retailing and whole selling via Peninsular Malaysia’s agents.
Industry profile: The current head-company was established in early 2009 in
peninsular Malaysia with 6 shareholders who have a good track record of financial
muscle.The industry is specialized in producing state-of-art pen to
satisfy the needs of customer around peninsular and west Malaysia .
Location of the business : Lot 26, Jalan Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Date of business commencement : 01/04/09
Factors in selecting the purposed venture:
The factors considered when this venture was selected among them were the capital
requirements to start the business because of the nature of the business. The fact
that our product doesn’t require much investment made the proposed venture more
suitable and reliable in term of generating profit. In addition, the product is
considered as one of the latest gadget for tech-savvies and that is why the purposed
venture can be a big hit among students and working adults.Last but not least, the
product designed by our current company ,in term of price and affordability, is quite
reasonable among our main competitors whose product share the utmost similarity.
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Future prospects of the business:
This business is deemed as really profitable and capable of doubling the revenues in
a long term time because of the nature of the product.Product designed by us is
technology based which is common among youths and adults these days. So, like
other gadgets,the company can expect the sales of the product to grow with a
healthy ratio throughout its introductory and maturity stages.Furthermore, the
product is expected to hit the peak in its second year of introduction with the demand
of its refill ink grow at the same pace.
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2.2 PURPOSE OF PREPARING A BUSINESS PLAN
Every company should require a business for any operating group, division, or
subsidiary being formed and some businesses require a business plan for every new
product or project.
The Business Plan identifies the amount of financing or outside investment required
and when it is needed. This business plan is prepared by RAZL Company in purpose
obtaining working capital loan from CIMB for the amount of RM 100,000.
A business plan serves three functions. First, determining the future projects. It is a
plan that can be used to develop ideas about how the business should be conducted.
It is a chance to find strategies and “make mistakes on paper” rather than in the real
world, by examining the company from all perspectives, such as marketing, finance,
and operations. Second, determining how well goals have been met. It is a
retrospective tool against which a businessperson can assess a company’s actual
performance over time. For example, the financial part of a business plan can be
used as the basis for an operating budget, and can be monitored carefully to see
how closely the business is sticking to that budget. The plan can and should be used
as the basis for a new plan and a new goal. After some time has elapsed, and
thereafter on a periodic basis, the business plan should be examined to see where
and even why the company strayed, whether that straying was helpful or harmful,
and how the business should operate in the future. Thirdly, raise the money. Most
lenders or investors will not put money into a business without seeing a business
plan. There are stories of wild-eyed entrepreneurs and venture capitalists with pens
at the ready, who meet, scribble some projections on a wet cocktail napkin, shake
hands, and become “partners” in a hot technology business, but most of those
stories are urban legends.
First impressions are important. A well-organized plan is essential for a lender or
investor to assess your financing proposal and to assess you as a business manager.
A business plan may have allowed “teaming” with others, who could have helped
raise the necessary funds. Many less significant opportunities get funded.
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By committing your plans to paper, your overall ability to manage the business will
improve. You will be able to concentrate your efforts on the deviations from plan
before conditions become critical. You will also have time to look ahead and avoid
problems before they arise. It encourages realism.
It helps you to identify your customers, your market area, your pricing strategy and
the competitive conditions under which you must operate to succeed. This process
often leads to the discovery of a competitive advantage or new opportunity as well as
deficiencies in your plan.
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2.3 BUSINESS/COMPANY BACKGROUND
Name of the business : RAZL Company
Business Address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran.
52100, Kuala Lumpur.
Telephone/fax number : 03-8905121
Form of business ownership: Partnership
Date of commencement:01/04/09
Date of registration:01/02/09
Registration number: 5366-9
Initial (own) capital: RM100 000
Name of bank: CIMB Bank
Bank account number: 10002387245998-5
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2.4 BACKGROUND OF SHAREHOLDERS
Chief Executive Officer
Name : Mufaddal Bin Ali Husin
Identity card number : 770613-05-5117
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone Number : 016-2768952
Date of birth : 13 June 1977
Age : 32 years old
Marital status : Single
Academic qualification : Diploma in Mechanical Engineering (University
Malaya)
Degree in Mechanical Engineering (University
Malaya)
Masters of Business Administration (University
Malaya)
Courses attended : Enhancing business skill course in Nevada,
United States
Skills :The main skill possessed is ability to handle
company’s big and critical issues with perfect
solutions
Experience : Worked in various multi-national companies
namely in Middle-east and Asia as a general
manager.
Present occupation : Shareholder and Chief Executive Officer in RAZL
Pen (M) Sdn. Bhd
Previous business experience : Experience, worked in various multi-nationals
Company namely in middle-east and Asia as a
General Manager.
Capital contributes : RM100,000
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General Manager
Name : Chia Shi Long
Identity card number : 780103-04-5381
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone Number : 016-3468977
Date of birth : 03 January 1978
Age : 31 years old
Marital status : Single
Academic qualification : Degree in Business Administration in University
Malaya
Courses attended : Workshop For Asia-Pacific’s General Manager .
held in Manila, Philipines.
Skills : Ability to manage staff under him with a good
leadership and management skills to increase the
productivity of the staff.In addition, posses a good
critical thinking skills to solve problems on daily-
basis.
Experience : Worked in various multi-national company
namely in Middle-east and Asia as a general
manager.
Present occupation : Shareholder and General Manager in RAZL Pen
(M) Sdn. Bhd
Previous business experience : Experience, worked in various multi-nationals
Company as a General Manager.
Capital contributes : RM100,000
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Marketing Manager
Name : Lee Wan Xin
Identity card number : 781031-08-5978
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone number : 014-9041127
Date of birth : 31 October 1978
Age : 31 years old
Marital status : Single
Academic Qualification : Degree of Polymer Engineering in National
University of Singapore
Courses Attended : Chemical Reactor Seminar in UniMAP.
Skills :-
Experience : Work as a teacher in a tuition centre.
Present occupation : Shareholder and marketing manager in RAZL
Pen (M) Sdn. Bhd
Previous business experience : No experience
Capital contribution : RM100,000
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Accountant
Name : Tan Guan Chyi
Identity card number : 790401-14-6404
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Correspondence address :
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone number : 012-6781239
Date of birth : 1 April 1979
Age : 30 years old
Marital status : Single
Academic Qualification : ACCA certificate
Courses Attended : Degree in Accounting from Northern University of
Malaysia
Skills : Ability to use-of-art softwares to evaluate the
financial capabilities of company,thus,enhancing
the performance of financial sector in the head-
company.
Experience : Worked in state-owned company in Malaysia for
several years before joining RAZL company.
Present occupation : Shareholder and Accounting manager in RAZL
Pen (M) Sdn.Bhd
Previous business experience : -
Capital contribution : RM100,000
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Human Resource Manager
Name : Nurshila Binti Meterang
Identity card number : 790528-13-5366
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail (E-mail) address : [email protected]
Telephone number : 019-8783542
Date of birth : 28 May 1979
Age : 30 years old
Marital status : Single
Academic Qualification : Degree in Human Resource from Malaysian
Technological University (UTM)
Courses Attended : Human Resource Management in
Singapore.
Skills : Ability to manage staff in the company with
brilliant communication and interpersonal skill to
avoid any problems among the workers within the
company.
Experience : Worked in several multinational companies.
Present occupation : Shareholder and HRM Manager in RAZL Pen (M)
Sdn Bhd
Previous business experience : No experience
Capital contribution : RM100,000
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Production Manager
Name : Marcus Goh Kwok Tong
Identity card number : 790302-13-5376
Company permanent address : Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,
52100, Kuala Lumpur.
Website address : www.razl.com
Electronic mail(E-mail) address : [email protected]
Telephone number : 017-8756542
Date of birth : 2 Mac 1979
Age : 30 years old
Marital status : Single
Academic Qualification : Degree of Manufacturing engineering From
UniMAP.
Courses Attended : Quality Control briefing in Kuala Lumpur.
Skills : Ability to manage and control the production of
manufactured goods to a certain level so that the
company can avoid unnecessary losses.
Experience : Worked in several multinational companies.
Present occupation : Shareholder and Production Manager in RAZL
Pen (M) Sdn Bhd
Previous business experience : No experience
Capital contribution : RM100000
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2.5 Location of the Business
Razl Pen (M) Sdn. Bhd
Address: Lot 26, Jalan Metro Perdana Barat 3,
Kawasan Perindustrian Sri Edaran,52100, Kuala Lumpur.
Building: Single-storey factory with attached main operating office which will be
located in Sri Edaran Industrial Area. The factory was previously used by Mufurry
(M) Sdn. Bhd. and now has been purchased by our company .It has been
renovated and all faulty area has been repaired .The factory covers an area of
25m x 20m excluding the office area. The building was estimated at RM 800,000
by our company’s evaluator.
Razl Pen (M)
Sdn.Bhd
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2.6 Organization / Management /administrative plan
a. Introduction to the Organization
Organization’s mission
Our organization mission is to experience the joy of advancing and applying
technology for the benefit of the public. Our organization is to create some different
idea of how to applying newest technology into our daily life nowadays. Our
organization is trying to use the lowest cost material to create new technology so that
everybody can own the newest technology.
Vision
Razl recognizes that global environmental improvement is the most important
issue for humanity in the 21st century.
Razl aims, through continuous technological innovation and new business
initiatives, to contribute positively to the natural environment and the dreams
of future generations.
Recognizing the utmost importance of our natural life-support systems,
sustainable economic development is the top business priority for the Razl.
Sustainable economic development means utilizing our environmental
resources in a manner that will also allow future generations to achieve their
potential for health, wealth and happiness.
Razl aims to show that it is possible to achieve a new balance between
humankind and nature by doing more with less, reducing the environmental
impact arising from our use of energy and resources while providing high
quality, high performing products and services to our customers.
Objective
To reduce power use of products by an average of 30% by 2005 (against
figures for 2000).
To achieve a standby power consumption of 0.1 W or less for all products by
2009.
To achieve a 15% reduction in energy use (relative to sales) at our
manufacturing and non-manufacturing sites (against figures for 2009).
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b. Organization chat
c. Manpower planning
Position Number of employees
Chief Executive Officer 1
General manager 1
Production manager 1
Marketing manager 1
Human resource manager 1
Accounting manager 1
workers 10
Chief Executive Officer
Mufaddal bin Ali Hussein
Production manager
Marcus Goh Kwok Tong
Marketing manager
Lee Wan Xin
Human Resourse manager
Nurshila binti Meterang
Acccounting manager
Tan Guan Chyi
General manager
Chia Shi Long
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d. Schedule of Tasks and Responsibilities
Position Main Task
General manager decide on the organisation's objectives, policies
and programs and set standards and targets
assess the performance of the organisation and
its activities
provide overall direction and management of
the organisation's utilisation of resources,
including personnel, technology and physical
assets such as buildings
Chief executive office provide a monthly task list and timesheet to the
Board
liaise with and report to the Board of Directors
participate in Board meetings and discussions
support the Board with its business
identify, appoint and manage staff, contractors
and volunteers
develop and oversee implementation of
strategic plan, business plan & risk
management plan
oversee policy development and
implementation
communicate operational decisions to the
membership
liaise with key external stakeholders, in
particular WFDF and the ASC
fulfil duties and responsibilities of any key
executive officers when absent
any other directions or delegations from the
Board
Production manager overseeing the production process, drawing up a
production schedule;
ensuring that the production is cost effective;
making sure that products are produced on time
and are of good quality;
working out the human and material resources
needed;
drafting a timescale for the job;
estimating costs and setting the quality
standards;
monitoring the production processes and
adjusting schedules as needed;
being responsible for the selection and
maintenance of equipment;
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monitoring product standards and implementing
quality-control programmes;
liaising among different departments, e.g.
suppliers, managers;
working with managers to implement the
company's policies and goals;
ensuring that health and safety guidelines are
followed;
supervising and motivating a team of workers;
reviewing the performance of subordinates;
Identifying training needs.
Marketing manager
Create and manage customers, campaigns,
advertisements, discounts, coupons/promotion
codes, expressions, direct mail, and lists.
Personalize the buying experience with
targeted merchandising.
Create and schedule campaigns for customers
who compete in the same industry. The
competing ads never appear on the same
page.
Create direct mail to distribute e-mail message
ads to a targeted group of users. Direct
mailings can include attachments, such as
pictures, discounts, or URLs.
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Human resource manager develop human resources
plans that are aligned to
the organisation's strategic
plan
advise management on
staff and job matters
train managers to take on
human resources tasks
such as selecting job
candidates
write job descriptions
analyse and advise on
wage and salary plans
consult with management,
staff and unions over pay
and conditions
check the company is
complying with
employment legislation
manage the human
resources team
work with health and
safety consultants on
health and safety
procedures
interview and select staff
and design staff training
courses
keep staff records up to
date
manage the payroll
manage the personnel
filing systems and the
organisation's human
resources information
systems.
Accounting manager manage the cash flow in and
out of the organisation
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be involved in deciding on the
financial and business viability
of new and existing projects
and programmes
analyse financial records such
as payroll and income trends
plan and prepare budgets and
documents, such as the annual
report, according to
organisational goals
analyse and monitor the effect
of budget or policy changes on
the organisation's productivity
plan and manage computer
systems that record and store
information
ensure staff have suitable
workloads and materials, and
that they produce appropriate
information
advise on the use of staff and
resources
evaluate the efficiency of work
practices and administration
ensure statutory requirements
are met; for example, making
sure IRD payments are paid on
time
ensure financial accounts are
completed
be responsible for insuring
company assets
ensure money owed to the
organisation is collected
advise on legal matters.
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e. Schedule of Remuneration
Position Number of
employees
Monthly
salary(RM)
EPF
contribution/SOCSO
Total(RM)
Chief
Executive
Officer
1 3000.00 240.00 2760.00
General
Manager
1 2800.00 224.00 2576.00
Production
manager
1 2000.00 160.00 1840.00
Marketing
manager
1 2000.00 160.00 1840.00
Human
resource
manager
1 2000.00 160.00 1840.00
Accounting
manager
1 2000.00 160.00 1840.00
workers 10 6000.00 480.00 5520.00
f. List of office equipment
Type of equipment Quantity Price per unit(RM) Total cost (RM)
Furniture and
fixtures
16 500.00 8000.00
stationary 6 10.00 60.00
h. Administrative Budget
Fixed asset
expenses
Monthly
expenses(RM)
Other
expenses(RM)
Furniture and
fixtures
8,000.00 - -
Salaries - 19,800 -
Rental - - -
Rental deposit - - -
Utilities - 3,000.00
Total 8,000.00 19,800 3,000.00
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2.7 Marketing Plan/Analysis
a. Description of product
Razl pen is a new product specially designed and manufactured by our company. It
is a pen which combines 3 functions which is ability to play mp3 songs, timer and
voice-recording function.It is specially designed for modern tech-savvy students and
working adults and allows them to get access to music anytime, anywhere.
b. Target market
Teenager between age 13-21.
Working Adults
University student
c. Market size
There is about 30,000 people that include in the target market.
d. Competition
Name and address Strength weakness
Foong Long Trading
No.23,Jln Pecah Batu,
Kawasan
perindustrian sri
maju,52100,
KualaLumpur.
Operate more than 3
years
Price of product very high
Sri Jaya
No,50,Jln Harimau ,
Kawasan perindustrian Sri
Edaran,52100,Kuala
Lumpur
Price of product is low Product will be easily
broken
Gemilang Sdn Bhd
No, 56 Jln King,
Kawasan perindustrian
Yuni,
521000, Kuala Lumpur.
The design of product is
attractive
The follow-up services not
good
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e. Market share
(market share before the entry of our enterprise)
Competitor Market share division (%) Annual sales
estimation(RM)
Foong long Trading 25 200,000.00
Sri jaya 33 250,000.00
Gemilang sdn bhd 42 300,000.00
Total 100 750,000.00
(Adjusted market share after the entry of our enterprise)
Competitor Market Share Division(%) Annual Sales
Estimation(RM)
Foong Long Trading 20 150,000.00
Sri jaya 15 100,000.00
Gemilang sdn bhd 25 250,000.00
Our company 40 300,000.00
Total 100 800,000.00
f. Sales forecast
Year Month Sales Forecast(RM)
1 1 20,000.00
2 22,000.00
3 19,000.00
4 21,000.00
5 20,000.00
6 21,000.00
7 18,000.00
8 18,000.00
9 22,000.00
10 20,000.00
11 20,000.00
12 21,000.00
2 250,000.00
3 280,000.00
g. Marketing Budget
Item Fixed assets
expenses(RM)
Monthly
expenses(RM)
Other
expenses(RM)
Van 30,000.00
Promotion 400.00
Vehicle insurance 300.00
Total 30,000.00 400.00 300.00
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2.8 Operation Plan/ Production Strategy
Material Requirements
Item Quantity
Required
Price per
Unit
(RM)
Total
Purchase
(RM)
Supplier
Stainless Steel
Pen Structure
500 RM0.50 RM250 Evershine Stainless Steel
Sdn Bhd
Rubber 500 RM0.10 RM50 Hartalega Sdn Bhd
Plastic 500 RM0.20 RM100 Hartalega Sdn Bhd
Refill Ink 500 RM0.50 RM250 Pilot Sdn Bhd
MP3 Chipset 500 RM35.00 RM17500 MEMC Electronic
Materials Sdn Bhd
Capacitor 500 RM5.00 RM2500 MEMC Electronic
Materials Sdn Bhd
Tin 500 RM0.30 RM150 Evershine Stainless Steel
Sdn Bhd
L.E.D 500 RM5.00 RM2500 MEMC Electronic
Materials Sdn Bhd
Microphone 500 RM3.00 RM1500 MEMC Electronic
Materials Sdn Bhd
Wire 300meter RM0.10
per meter
RM30 MEMC Electronic
Materials Sdn Bhd
Manpower Requirements
Position No. of
Employees
Job Status Remuneration
per Month
EPF Total
Production
Manager
1 To manage
all the
production.
RM2000 RM160 RM1840
Quality
Control
1 To make
sure all the
product are
in quality
RM1500 RM120 RM1380
Supervisor 2 To make
sure all the
worker
working
RM1200 RM96 RM1104
Material Supplier
Factory
Shop
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smoothly
Workers 5 To produce
the product
RM600 RM48 RM552
Machine and Equipment
Items Quantity Price per Unit
(RM)
Total Costs
(RM)
Supplier
Pen Machine 1 RM20,000 RM20,000 Recron (M)
Sdn Bhd
Table 10 RM100 RM1000 IKEA Sdn Bhd
Chair 20 RM25 RM500 IKEA Sdn Bhd
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2.9 Financial Plan/Strategy/Analysis
Project Implementation Cost
Schedule
A. Capital Expenditure
RM RM RM
Land and Building (contributed
by owner)
800,000
Machinery and Equipment
20,000
Furniture and Fixtures
8,000
Vehicle- Van
30,000
Renovation cost
6,000
Sub-total
864,000
B. Working Capital (2
months)
Marketing
2,000
Production and Operation
8,000
Administrative
5,000
Sub total
15,000
C. Other Expenditure
Pre-operating
Business Registration
2,800
Insurance
500
Road tax
200
Sundries
200
3,700
Deposit
Utilities(Telephone, water and
electricity)
700
Sub-total
700
Grand total
883,400
D. Add: Contingency cost
(10%)
88,340
TOTAL PROJECT
IMPLEMENTATION COST
971,740
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Source of Financial Schedule
RM RM
A. Equity Contributions
Cash
71,740
Assets(land and building) 800,000
Sub-total
871,740
B. External Sources
Term Loan
100,000
Sub-total
100,000
C. Others
0
TOTAL SOURCES OF FINANCE
971,740
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Depreciation Schedules for Fixed Assets
Annual depreciation = Original Cost of Asset – Scrap Value
Asset’s Economic Life
Annual depreciation (vehicle) = RM30, 000 – RM5,000
5 years
Type of Asset : Van
Original Cost : RM30,000
Economic Life : 5 Years
Scrap value : RM 5000
Method : Straight line
Year Annual Accumulated Book
Depreciation
Depreciation Value
(RM) (RM) (RM)
0
0
0 30,000
1
5,000
5,000 25,000
2
5,000
10,000 20,000
3
5,000
15,000 15,000
4
5,000
20,000 10,000
5 5,000 25,000 5,000
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Annual depreciation (Furniture and Fixtures) = RM8, 000 – RM 0
4 years
= RM 2, 000
Type of Asset : Furniture and
Fixtures
Original price : RM 8,000
Economic life : 4 years
Scrap value : RM 0
Method : Straight line
Year Annual Accumulated Book
Depreciation
Depreciation Value
(RM) (RM) (RM)
0
0
0 8,000
1
2,000
2,000 6,000
2
2,000
4,000 4,000
3
2,000 6,000 2,000
4 2,000 8,000 0
Annual depreciation (Machines) = RM 20, 000 – RM 2,000
6 Years
= RM 3, 000
Type of Asset : Machines
Original Cost : RM20,000
Economic Life : 6 Years
Scrap value : RM 2000
Method : Straight line
Year Annual Accumulated Book
Depreciation
Depreciation Value
(RM) (RM) (RM)
0
0
0 20,000
1
3,000
3,000 17,000
2
3,000
6,000 14,000
3
3,000
9,000 11,000
4
3,000
12,000 8,000
5
3,000
15,000 5,000
6 3,000 18,000 2,000
EUW 224 Engineering Entrepreneurship “Razl Pen”
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Pro Forma Income Statement for Razl Pen (M) Sdn. Bhd
RM RM
Sales
32,500
Cost Of Goods Sold:
Opening stock for finished goods
0
Add: Cost of goods manufactured
15,000
Goods available for sale
15,000
Less: Closing stock for finished goods 7,000
8,000
Gross Profit
24,500
Less: Operating Expenses
Administrative Expenses
5,000
Marketing
2,000
Interest:
Term loan
2,000
Depreciation charges
10,000
Miscellaneous
1,000
Total operating expenses
20,000
Net Profit Before Tax
4,500
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Pro Forma Balance Sheet for Razl Pen (M) Sdn. Bhd
RM RM
FIXED
ASSETS
Land and Building
800,000
Machinery and
equipment
20,000
Furniture and fixtures
8,000
Renovation
6,000
Van
30,000
864,000
CURRENT ASSETS
Cash
20,000
Bank
500,000
Closing stock for raw materials 7,000
Closing stock for finished goods 7,000
534,000
OTHER ASSETS
Deposits
700
TOTAL ASSETS
1,398,700
EQUITY
Capital
1,294,200
Accumulated profit
4,500
1,298,700
CURRENT LIABILITIES
0
LONG TERM LIABILITIES
Term loan
100,000
TOTAL EQUITY AND LIABILITIES
1,398,700
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Break Even Analysis
32,500=65 units x RM 500
Break-Even Point:
Break even point (ringgit) = RM19500
0.631units
= RM 30,900
Contribution margin = RM 32500- RM12000
= RM 20,500
Contribution Margin Ratio= RM 20500
RM32,500
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3.0 Design
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4.0 Conclusion
As a conclusion, our company had used the lower capital to produce a useful,
durable product that is Razl Pen. This pen combined three functions which is MP3,
timer and voice recorder. And we believe this pen will bring convenient to the entire
customer who buy our product. Even we still a new company in the marker, but we
believe our product will become popular in 1 day. Not only that, we will always
innovate our Razl Pen to make sure our product keep in update to the global world.
5.0 Reference
1. http://www.lofsa.gov.my/lofsa5/legislation/LabuanOffshoreLimitedPartnershipAct1
997.pdf
2. http://www.smallbusinessnotes.com/operating/legal/samplepartnership.html
3. http://job-search.jobstreet.com.my
