Paper Clip Production Factory
Paper Clip Production Factory
Land- I need land onto which I will build my Factories, and I need the metals with which I can produce my paper clips. Also the land provides the materials for which my factories will me made out of.
People- I need people to be my workers. I will need some management and some labor staff. Also I need people who will buy my product.
Capital- My parents are fabulously rich, and they put up the capital to buy the land and build the factory.
Entrepreneur- I am the entrepreneur. I came up with the Idea in a dream.
Materials
Materials cost $
Steel
0,000
Tin
20,000
Cardboard
700
Ink
,000
The total Materials cost for one month's paper clip productions is $31,700
Job
Number of workers
Hourly pay x number of hours per day x number
of days per month
Labor/Management Costs per month $
Guys that Operate the machinery
20
$11 x 8 x 20
35,200.00
Factory maintenance
4
$6.5 x 4 x 20
2,080.00
Repair guy
2
$13.5 x 4 x 8
864.00
Bookkeeper
$15 x 8 x 10
,200.00
Factory Manager
$25 x 8 x 20
4,000.00
Guys that stack the big ...
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Job
Number of workers
Hourly pay x number of hours per day x number
of days per month
Labor/Management Costs per month $
Guys that Operate the machinery
20
$11 x 8 x 20
35,200.00
Factory maintenance
4
$6.5 x 4 x 20
2,080.00
Repair guy
2
$13.5 x 4 x 8
864.00
Bookkeeper
$15 x 8 x 10
,200.00
Factory Manager
$25 x 8 x 20
4,000.00
Guys that stack the big Boxes for shipping
5
$10 x 4 x 20
4,000.00
The total worker cost per month for the factory is $47,344.00
Utilities/Mortgage
Costs
Water
$500.00
Electricity
$1000.00
Mortgage
$3500.00
The total costs for land and utilities per
Month is $5000.00
Number of Little Boxes Shipped each Month
Wholesale price to stores per box
200,000
$0.50
Total Gross Income per month is $100,000.00
Total costs per month is $84,044.00
Total net income per month is 15,956.00
Oh no my material costs have doubled! Now I have to re plan my business. So here it is.
First I refinanced my mortgage at a lower rate, and then I took out a second mortgage to finance improvements and to triple the size of the factory so I could make thrice the number of paper clips. Then I put 75% more steel in each paper clip, and cut the amount of tin in each one by 75%. Finally I switched to recycled cardboard, which was cheaper.
Materials
Materials cost $
Steel
05,000
Tin
30,000
Cardboard
3,000
Ink
6,000
The total Materials cost for one month's paper clip productions is $141,000
Since I have a bigger factory now I have to hire more people
Job
Number of workers
Hourly pay x number of hours per day x number
of days per month
Labor/Management Costs per month $
Guys that Operate the machinery
50
$11 x 8 x 20
88,000.00
Factory maintenance
0
$6.5 x 4 x 20
5,200.00
Repair guy
5
$13.5 x 4 x 8
2,160.00
Bookkeeper
$15 x 8 x 10
,200.00
Factory Manager
$25 x 8 x 20
4,000.00
Guys that stack the big Boxes for shipping
5
$10 x 4 x 20
2,000.00
The total worker cost per month for the factory is $112,560.00
I also put solar panels on the rough of the factory with the money from the second mortgage, so now I make most of my own electricity. Even though I refinanced my mortgage at a lower rate, I took out a second mortgage so my mortgage payment balanced out to be the same as it was before.
Utilities/Mortgage
Costs
Water
$1000.00
Electricity
$50.00
Mortgage
$3500.00
The total costs for land and utilities per
Month is $4,500.00
Number of Little Boxes Shipped each Month
Wholesale price to stores per box
600,000
$0.50
Total Gross Income per month is $300,000.00
Total costs per month is $258,110.00
Total net income per month is $41,890.00
