CERAMIC PRODUCTION

A Feasibility Study

Presented to

The Faculty of the Collage of Business Education

Of

Northeastern Mindanao Collages

Surigao City

In Partial Fulfillment

Of the Requirements for the Degree

Bachelor of Science in Business Administration

By:

GABALIGNO, CHERR VILL E.

ARANA, ZUCCHINI S.

AYAG, JAEANN A.
 APPROVAL SHEET

In partial fulfillment of the requirement for the degree of BACHELOR OF

SCIENCE IN BUSINESS ADMINISTRATION this feasibility entitled: “CERAMIC

PRODUCTIION”has been prepared and submitted by Gabeligno, Cherry Vill E, Arana,

Zucchini S and Ayag, Jaeann A who are recommended for ORAL EXAMINATION.

RESEARCH COMMITTEE

TEODOCIO B. TUOZO, CPA, MBA

Chairman

CATHERINE M. PACATANG, MBA JUNAL MAY T. BERMOY, LPT

Member Member

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

PANEL OF EXAMINERS

Approved by the Committee on Oral Examination with a grade of PASSED.

TEODOCIO B. TUOZO, CPA, MBA

Chairman

CATHERINE M. PACATANG, MBA JUNAL MAY T. BERMOY, LPT

Member Member

Accepted and approved in partial fulfillment of the requirement for the degree of

BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION

TEODOCIO B. TUOZO, CPA, MBA

Dean, College of Business Education
 ACKNOWLEDGEMENT

This feasibility study would not have been possible without the unwavering

support and guidance we received from Ma’am Catherine Pacatang, our feasibility

instructor, and Ma’am Junal Tuozo who generously shared their knowledge with us with

patience and diligence throughout the study. We shall be eternally grateful to each of

you.

Further, we express our profound gratitude to our beloved Dean Mr. Teodocio B.

Touzo, CPA, MBA for assigning such practical and for his continuous support and

inspiration to this study. His valuable suggestion and guidance have helped us a lot for

successful completion of this feasibility study.

We also give thanks to our parents for their unwavering support and

unconditional understanding, as well as for sharing their wisdom that inspires us to strive

hard.

Finally, we take this opportunity to acknowledge the individual member and

everyone who collaborated in producing this work. We have tired our best to make this

feasibility study successful.

Above all, we express our heartfelt gratitude to our Almighty God for ensuring our

safety and providing us with the resources required to complete this study. “Thank you

God”.

God Bless.
 TABLE OF CONTENTS

Acknowledgement i

Table of Contents ii

List of Table v

List of Figure vi

CHAPTER 1 - EXECUTIVE SUMMARY

Introduction 1
General Objective 1
Management Feasibility Summary 2
Marketing Feasibility Summary 2
Technical Feasibility Summary 2
Financial Feasibility Summary 2
Socio-Economic Impact Summary 3
Significance of the Study 3
Scope and Limitations of the Study 3
Methodology 4
Conclusion to the Feasibility Study 4
Definition of Terms 5

CHAPTER 2 - MANAGEMENT FEASIBILITY

Business Organization 7
Advantages of Sole Proprietorship 8
Disadvantages of Sole Proprietorship 8
Organizational Structure 8
Business Location 9
Location Map 10
Sketch Map 10
Management Personnel Requirement 11
Salaries and Wages
12
Regulatory Requirements 13
Building Facilities and Equipment Requirements 14
Building Construction Costs Requirements 16
Perspective View 17
Floor Map 17
Office Furniture and Fixtures Requirements 18
Office Equipment Requirements 19
 Office Supplies Requirements 19
Projected Office Supplies 20

CHAPTER 3 – MARKETING FEASIBILITY

Market Environment 21
Target Market 21
Competition 21
Direct Competitors 22
Indirect Competitors 22
Industry 22
Business Model 17
Marketing and Sales Strategies 18
Channel of Distribution 19
Demand and Supply Projections 19
Demand 20
Supply 20
Demand and Supply Gap 21
Production 22
Market Share 22
Sales Revenues 23
Cost/Pricing Analysis 23
Inventory Costing 24

CHAPTER 4 – TECHNICAL FEASIBILITY

Product Description 25
Manufacturing Process 25
Nutritive Value and Health Benefits 29
Production Requirements 29
Production Furniture and Fixtures Requirements 30
Production Equipment Requirements 30
Raw Materials Requirements 31
Production Supplies Requirements 32
Water Consumption 33
Electric Consumption 34

CHAPTER 5 – FINANCIAL FEASIBILITY

Assumptions 34
Total Project Cost 35
Loan Amortization Schedule 36
Cost of Goods Sold 37
Statements of Income Projections 38
Statements of Changes in Equity Projections 39
Statements of Cash Flows Projections 40
Statements of Financial Position Projections 41
Common-Size Statements of Cost of Goods Sold Projections 42
Common-Size Statements of Income Projections 43
 Common-Size Statements of Changes in Equity 44
Common-Size Statements of Financial Position Projections 45
Common-Size Statement of Cash Flows Projections 46
Financial Statement Analysis 47
Break-Even Analysis 48
Income Tax Computation 49

CHAPTER 6 – SOCIO-ECONOMIC IMPACT FEASIBILITY

Regulation/Environmental Issues
Contributions to the Philippine Economy

References

Annexes

Computation (demand and supply gap)

Canvass Form Regulatory

Curriculum Vitae

LIST OF TABLE
No. Title Page
2.0 Management Personnel Requirement 13
2.1 Employee Contribution 13
2.2 Employer Contribution 13
2.3 Regulatory Requirements 15
2.4 Store Cost Renovation 17
2.5 Office Furniture and Fixtures Requirements 18
2.6 Office Equipment Requirements 19
2.7 Office Supplies Requirements 20
2.8 Office Supplies Projections 20
2.9 Rent Expense 21
3.0 Individual Population 29
3.1 Demand Projections 29
3.2 Supply Projections 30
3.3 Demand and Supply Gap 31
3.4 Production Table 31
3.5 Market Share 32
3.6 Sales Revenue 33
3.7 Costing/Pricing Analysis 33
3.8 Inventory Costing 33
4.0 Production Furniture and Fixtures Requirements 40
4.1 Production Equipment Requirements 41
4.2 Raw Materials Requirements 41
4.3 Raw Materials Projections 42
4.4 Production Supplies Requirements 42
4.5 Production Supplies Projections 43
 4.6 Water Consumption 43
4.7 Electric Consumption 44
5.0 Total Project Costs 46
5.1 Loan Amortization Schedule 47
5.2 Projected Statements of Cost of Goods Sold 48
5.3 Projected Statements of Income Projections 49
5.4 Projected Statements of Changes in Equity 50
5.5 Projected Statements of Cash Flows 51
5.6 Projected Statements of Financial Position 52
5.7 Common-Size Statements of Cost of Goods Sold Projection 53
5.8 Common-Size Statements of Income Projections 54
5.9 Common-Size Statements Changes in Equity Projections 55
5.10 Common-Size Statements of Financial Position Projections 56
5.11 Common-Size Statements of Cash Flows Projections 57
5.12 Financial Statements Analysis 58
5.13 Break-Even Analysis 58
5.14 Income Tax Computation 59

LIST OF FIGURE
No. Title Page
2.0 Organizational Charts 9
2.1 Location Map 11
2.2 Sketch Map 12
2.3 Perspective View 17
2.4 Floor Plan 18
3.0 Channel of Distribution 27
 CHAPTER 1

EXECUTIVE SUMMARY

INTRODUCTION

Ceramic pots are made by forming a ceramic (often clay) body into objects of a

desired shape and heating them to high temperatures, in a bonfire, pit or kiln an induces

reactions that lead to permanent changes including increasing the strength and rigidity of

the object. Pottery is one of the oldest and most widespread of the decorative arts,

consisting of objects made of clay and hardened with heat. The objects made are

commonly useful ones. Cooking pot can be used to prepare a variety of dishes and are

versatile tools in the kitchen which help us to handle and prepare food, vases are often

decorated, and melting pot for melting gold to make jewelries.

Proponents are in this field of business not just to make money, provide value to

customers but to introduce the traditional kitchen utensils, vases and melting pot in

today’s generation and changing society.

GENERAL OBJECTIVES

The following objectives is set by the proponents to achieve the desired goal of the

proposed business;

 To encourage and give value to the ceramic production that specialized cooing

pot, vases and melting pot.

 To preserve the pottery community and provide employment.

 To present the finished product uses.

1
MANAGEMENT FEASIBILITY SUMMARY

Ceramic Production belongs to sole proprietorship. The proponents chooses this

form of business due to its straightforward and typical business structure. The owner

entitled to all earnings and are accountable for any debts, losses, and liabilities incurred

in the business. The hired personnel are only those who are accountable in the

production of the products to minimize cost.

MARKETING FEASIBILITY SUMMARY

The ceramic production marketing will focus in Surigao del Norte. It will be

distributed to wholesaler and retailer to make the product procurable. End user may buy

directly from the production site.

To reach the desired consumers, the proponents are using social media flat

forms particularly facebook, also radios, website, and advertisement. By these, the

proponents strongly believe that will get costumer relationship as marketing continues.

TECHNICAL FEASIBILITY SUMMARY

This phase will act as graph for how the product evolve through the organization

to reach the target market. This is the scheme on how the business will be built,

manage, produce, market and gain. It outlines the product, the production methods, the

store location and layout, and the equipment to be utilized, as well as the size and cost

of the building and its facilities, the raw materials to be used, and the personnel

requirements needed in the firm.

FINANCIAL FEASIBILITY SUMMARY

Financial feasibility describes whether or not your project is fiscally viable. A

financial feasibility report includes a cost/benefit analysis of the project. The ceramic

production identify the project’s unique financing requirements in terms of the types and

2
costs to be obtained. It will discover alternative funding options, as well as the terms and

restrictions.

This will show the relationship between the capitals to be invested. Proponents

assume Total project cost of 400,000. The initial investment shows the financial health of

the company through inventory costing and market share.

SOCIO-ECONOMIC IMPACT SUMMARY

A ceramic product that also helps the government earn money. The operations'

socioeconomic impact should have been considered by the proponents in order to

understand the demand and supply gap for innovative and value-added products in

society. This component refers to the benefits that a company can offer that are related

to the economic situation of the country. It also indicates whether the product is market-

cost-effective.

SIGNIFICANCE OF THE STUDY

The study's proponents may use it as a tool to help them make better decisions,

improve existing products, and develop new ones. This may also provide them with a

significant competitive advantage over their competitors, allowing them to achieve their

goal of becoming well-known.

This feasibility study will be used to investigate new opportunities in the future. It

will provide them with valuable information on the various aspects of the project

feasibility research.

METHODOLOGY

This feasibility chapter explains the processes and suggests that all selected

methodologies be used in this study, as well as the reasons why they are used or

3
demonstrate in this section. To estimate the worth of the proposed project, the

proponents examine the revenues, expenses, and net income. The primary components

of a feasibility study that should be studied as part of determining the potential success

of the proposed business are explained by the proponents.

SCOPE AND LIMITATION OF THE STUDY

The range of this study covered Surigao del Norte. The proponents meets rigors

during the conduct of the study due to the following turbulent factors.

 Limited funds:

This factor affects the proponents in conducting research due to relying funds on

the allowances from the parents.

 Inaccessibility of respondents

The distance of residents made difficult to the proponents to reach out since it

will use another amount of money.

CONCLUSIONS TO THE FEASIBILITY STUDY

Overall, the proponents can say that the main purpose of this feasibility study is

to assess every aspect of a business that needs to be considered in order to see if it will

be a success or failure. This study plays a vital role in business development.

The purpose of those information included in our feasibility study is that the

proponents can allow a business to address the overall flow of its operation. This

feasibility study examines the market itself including potential facility users, competitors

offering similar services, potential facility costs and revenues, and options for project

development.

4
DEFINITION OF TERMS

Abrasives - is a material of a certain hardness and density that allows other materials to

be processed by removing the material itself. For example, one of the most common

operations that can be done with abrasives is the polishing of a surface or the polishing

of the same.

Accountable - (of a person, organization, or institution) required or expected to justify

actions or decisions; responsible.

Annual Depreciation - is the standard yearly rate at which depreciation is charged to a

fixed asset. This rate is consistent from year to year if the straight-line method is used. If

an accelerated method is used, then annual depreciation will spike early, and then

decline in later years.

Borides - is a compound between boron and a less electronegative element, for

example silicon boride (SiB3 and SiB6).

Ceramic - is any of the various hard, brittle, heat-resistant and corrosion-resistant

materials made by shaping and then firing an inorganic, nonmetallic

Clay - is a type of fine-grained natural soil material containing clay minerals (hydrous

aluminium phyllosilicates, e.g. kaolin, Al2Si2O5(OH)4).

Employability - refers to your ability to gain initial employment, maintain employment,

and obtain new employment if required.

Gross Domestic Product - is the standard measure of the value added created through

the production of goods and services in a country during a certain period. As such, it

5
also measures the income earned from that production, or the total amount spent on

final goods and services (less imports).

Growth rate - are used to express the annual change in a variable as a percentage. A

positive growth rate indicates a variable is increasing over time; a negative growth rate

indicates that it is decreasing. Growth rates can be beneficial in assessing a company's

performance and predicting future performance.

Inventory Costing - also called inventory cost accounting, is when companies assign

costs to products. These costs also include incidental fees such as storage,

administration and market fluctuation.

Metallurgy - is defined as a process that is used for the extraction of metals in their pure

form. The compounds of metals mixed with soil, limestone, sand, and rocks are known

as minerals. Metals are commercially extracted from minerals at low cost and minimum

effort.

Phosphide - In chemistry, a phosphide is a compound containing the P3− ion or its

equivalent. Many different phosphides are known, with widely differing structures

Selenide - is a chemical compound containing a selenium anion with oxidation number

of −2 (Se2−), much as sulfur does in a sulfide.

Silicide - a type of chemical compound that combines silicon and a (usually) more

electropositive element.

Telluride - mineral is a mineral that has the telluride anion as a main components.

6
 CHAPTER 2

MANAGEMENT FEASIBILITY

BUSINESS ORGANIZATION

A business organization is a legal company formed to do business. Legal systems that

regulate contract and exchange, property rights, and incorporation are among the underpinnings

of such an organization.

Individual proprietorship, partnerships, and limited-liability companies are the three most

common types of business enterprises (or corporations). In the first, a single individual owns the

entire operation and manages it on a day-to-day basis. This describes the majority of

enterprises. The partnership, on the other hand, can contain anywhere from two to fifty

members, as seen in large law and accountancy firms, brokerage houses, and advertising

agencies. The third type, the limited-liability company, or corporation, refers to incorporated

groups of people—that is, a group of people who are treated as a legal entity (or fictive

"person") with its own property, powers, and liabilities. This type of business is also legally

distinct from the people who work for it, whether they are shareholders, workers, or both; it can

have legal relationships with them, engage into contracts with them, and sue and be sued by

them. The majority of large industrial and commercial enterprises are limited-liability

corporations.

In this proposal, Ceramic Production belongs to sole proprietorship. A sole proprietorship

is the most straightforward and typical business structure. It is an unincorporated company

owned and operated by a single person, with no distinction between the company and the

owner. The owner entitled to all earnings and are accountable for any debts, losses, and

liabilities incurred in the business.

7
 Below shows the advantages and disadvantages of the sole proprietorship.

Advantages

 Easy and inexpensive to form

 Complete control

 Simplified tax preparation

 Less paper works to get started

 More straightforward banking

Disadvantages

 Unlimited personal liability

 Heavy burden

 Hard to raise money

 Capital is limited

ORGANIZATIONAL STRUCTURE

An organizational structure is a system that specifies how particular operations should

be directed in order to meet the organization's objectives. These activities can include rules,

roles, and responsibilities. The company's organizational structure also impacts how information

moves between tiers.

OWNER/CASHIER

WORKER 1 WORKER 2

The Figure 2.0 Organizational Structure

Figure 2.0 shows the structure of the propose business. The owner is handled by one

person for the reason this business does not require many workers. The position indicated

8
below are purposely joint to minimize the operating expenses. In addition, the worker will report

directly to the CEO/owner and are expected to their assigned duties.

 Owner/Cashier are in charge of the business. It’s not just the company's face, but are

also ultimately responsible for the company's achievements and failures. The owner

leads a business with the help of other workers. And is also responsible for planning,

preparing and managing the publication and distribution of publicity materials. It is

responsible in selling the products. Owner ensure that operations run smoothly

throughout the year. Setting requirements, studying the market, evaluating providers,

negotiating contracts, and managing risk are all part of this process and organization

achieve certain objectives. The one who are in charge of all shaping matter in ceramic

like in vases, pottery, etc. Also, the preparation of all material needs.

 Worker 1 and 2 are in charge of molding all ceramic materials, such as vases, pottery,

etc. They are also in charge of preserving the ceramics' good texture, of the fire

processes, and even the preparing for display. To put in simply, they are in to

production.

BUSINESS LOCATION

It is necessary of choosing the right location, it is a place where have a business

operation, to the fact that choice of location affects the income, expenses, and sometimes

the operating legally. Because nowadays people can buy and sell through internet so that’s

why location plays a significant role in a business. It is about being somewhere customers

will see the area, about being in a competitive location, about staying within budget. As for

the budget, for the lot owner trade the chosen location and it is an installment basis for the

affordable price of P1,000.00 per square meter, the lot need is 96 sqm that equivalent of

P96,000.00 in P8,000.00 payment per month. The chosen business location is abundant of

resources like water, sand & clay that are primary ingredients in making ceramic products.

9
 Aside from it, it easily catches the customers attention because it is located along the

national high-way with 6 meters far. An open area that easily park without hassle and a

nature ambiance.

FIGURE 2.1 LOCATION MAP

Figure 2.1 Location Map shown above is the proposed business location located at Brgy.

Bugas-bugas, Placer, Surigao del Norte along the national highway and with the distance from

the highway of 6 meters which follow the standard and conventional rules according from the

DPWH. The place located in purok 2 of the barangay, has two houses next to and in front of it,

and is a short walk from the center or crossing of the entire barangay.

10
 FIGURE 2.2 SKETCH MAP

Figure 2.2 Sketch Map is the sketch were household and other present building are seen

with its legend that can easily locate the proposed business location as well as the neighboring

household that are stated above in the figure 2.1.

MANAGEMENT PERSONNEL REQUIREMENTS

The qualitative personnel requirement specifies the requirements for employee

performance, such as qualification, knowledge, and employability

TABLE 2.0 MANAGEMENT PERSONNEL REQUIREMENT

POSITION JOB DESCRIPTION QUALIFICATION DAILY MONTHLY

WAGE SALARY
 Are in charge of
the
organization.
 Not just the
company’s
face, but they
are also None None None
Owner/Cashier ultimately
responsible for
the company’s
achievements
and failures.
 The owner
leads a
corporation with
the help of
other officials.
 Ensures that
the operation
runs smoothly.
 Ensure the  Any gender
preparation of  Trustworthy
the products.  Self-discipline
 Maintains the  Passionate
good texture of  Optimistic
the ceramics.  Hardworking 350 7,000
WORKERS (1,  Responsible  Neat
2) for the  Good
increase communicator

11
  Help  Flexible
organization  Have a good
achieve certain record
objectives.
Total Cost Directly Attributed to Labor 700 14,000
Annual Salary (Inclusive of 13th Month Pay) 14,000

Table 2.0 Management Personnel Requirement shows the job description and

qualification of the personnel in this production that is in charge in all the task and responsibility

on how the business will operate and handle in order to improve into a successful one. The two

(2) workers' daily pay are shown above along with their monthly salaries, which are P350.00

and P7,000.00, respectively. The salary is specified as a monthly basis salary.

TABLE 2.1 PERSONNEL CONTRIBUTION EMPLOYEE

ANNUAL PHIIL- 13TH MOTH

DESCRIPTION SSS PAG-IBIG TOTAL NET TOTAL NET PAY
SALARY HEALTH PAY
Worker 1 84000 3780 3360 1680 8820 75180 7000 82180
Worker 2 84000 3780 3360 1680 8820 75180 7000 82180
TOTAL 168000 7560 6720 3360 17640 150360 14000 164360

Table 2.1 Personal Contribution Employee including the annual salary, deduction of

SSS, Phil-Health and Pag-Ibig, the net total, 13 th month pay and lastly the net pay. The annual

salary of P84,000 is from the monthly rate salary of P7,000.00 multiplied by 12 months. The

deduction from SSS of 4.5%, Phil-Health of 4% and Pag-Ibig of 2% with the total of P8,820.00.

The net total of P75,180.00 is from the annual salary minus the total deduction. The 13 th month

pay of P7,000.00 from the annual salary divided by 12 months. While the net pay of P82,180.00

from the net total added by 13th month pay. The amount stated are indicated for one worker only

not the overall.

12
 TABLE 2.2 PERSONNEL CONTRIBUTION EMPLOYER

DEDUCTION TOTAL
DESCRIPTION
SSS PHILHEALTH PAG - IBIG CONTRIBUTION
Worker 1 6720 3360 1680 11760
Worker 2 6720 3360 1680 11760
Total 13440 6720 3360 23520

Table 2.2 shows the Personnel Contribution Employer the deduction from SSS, Phil-Health and

Pag-Ibig of 10.5%, 4%, and 2% respectively.

REGULATORY REQUIREMENTS

Starting a business is not that easy at all, always have numerous requirements that

needs to be complied. No matter the industry or company size, all business must to certain laws

and regulations as part of operations. Regulatory compliance, in fact, deals with a set of

guidelines that the law requires organizations to follow.

A. Barangay Clearance

Since the proposed business is located at Brgy. Bugas-bugas,Placer, Surigao del Norte,

the owner or proprietor must secure Barangay Clearance wherein the business is located.

B. Mayor’s Permit/Business Permit

The Business Permit is often also referred to as Mayor’s Permit. The business is a key

compliance document which entitles and enables a business to legally operate a do business in

the area in which the business is registered.

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C. BIR Certificate of Registration

A certificate to be accomplished and issued by a payor to recipients of income not

subject to withholding tax. This certificate should be attached to the Annual Income Tax Return-

BIR form 1701 for individuals.

E. Certificate of Business Name Registration from the Department of Trade and Industry

(DTI)

This rule is very important for registering your business name with the Department of

Trade and Industry. It is necessary to register a single proprietor with DTI to provide it with a

legal identity and gain the rights to use your business name.

F. Sanitary Permit

The legal document issued by the Department of Public Health and Social Services

authorizing the establishment to operate its business.

TABLE 2.3 REGULATORY REQUIRMENTS

DESCRIPTION COST FOR 2022 COST FOR 2026

Brgy. Clearance 150 150
Mayor's Permit/Business Permit 180 180
BIR Registration 500 500
Certificate of Business Name Registration from the DTI 500
Sanitary Permit 100 100
TOTAL REGULATOR FEES 1430 930

Table 2.3 shows the Regulatory Requirements above with the total regulatory fees of P1,430.

The gathered costs are from the assigned personnel who are in charge in releasing particular

papers.

BUILDING, FACILITIES AND EQUIPMENT REQUIREMENTS

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 The Ceramic business has a specified office intended for the clients and the proprietor

when in need for inquiries, a production where the ceramic products are made and a display

area where the products are physically placed and can be seen right away. The efficiency of a

business grows significantly when facilities are handled, there is very little that can cause work

to be disrupted. People will know where things are stored, reducing the amount of time spent

hunting for materials and enhancing efficiency. A well-kept facility provides a safe working

environment, lowers energy costs, and floor maintenance can be part of an effective facilities

management program, as can adequate landscaping and snow removal outside. The

proponents decided to buy the land and the land payable cost in total of P75,000 that starts

from January 2023 to June 2023 with the monthly payment of P12,500.

TABLE 2.4 BUILDING CONSTRUCTION COST REQUIREMENT

15
 DECRIPTION SOURCE QUANTITY UNIT COST TOTAL
Hollow block Paler Enterprises and Hollowblocks Supply 840 pcs 15 12600
Bar (kabilya) Amaneo Hardware 27 pcs 135 3645
Cement Amaneo Hardware 40 bag 270 10800
Sand Amaneo Hardware 1 dam 6000 6000
Paint (white) Amaneo Hardware 2 gallons 645 1290
Paint (green) Amaneo Hardware 1 liter 186 186
Tie wire Algreg Hardware 2 kls 100 200
Color roof Home Shed Roofing Services 10 pcs 660 6600
GI sheet- ordinary Home Shed Roofing Services 20 pcs 540 10800
Plain Steel Sheet Algreg Hardware 2 sheets 530 1060
Coconut lumber (2x3)Algreg Hardware 10 bundle 410 4100
Coconut lumber (2X2Algreg Hardware 3 bundle 450 1350
Plywood (1/2) Algreg Hardware 20 pieces 480 9600
Bulb Citi Hardware 5 pieces 120 600
Doorknob Citi Hardware 3 pieces 420 1260
Padlock Citi Hardware 2 Pieces 320 640
Floormat Citi Hardware 10 meters 42 420
Nail-Umbrella Algreg Hardware 1 kl. 100 100
Nail-2, 3 Algreg Hardware 2 kl 90 180
Nail- 5 Algreg Hardware 1 kl 90 90
Labor 30 days 500 15000
Helper 30 days 350 10500
TOTAL COST 97021

Table 2.4 Building Construction Cost Requirements shows the materials that are needed

in the construction of the building with the total cost of P97,021 with its estimated useful life of 5

years and annual depreciation of P19,404.2. It also shows the unit cost, the quantity and the

sources of each requirement.

PERSPECTIVE VIEW

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 FIGURE 2.3 FRONT ELEVATION

Figure 2.3 shows the perspective view having its concrete building with glass entrance

and roll up door and a color roof. Inside the building includes some painting, cabinet for the

ceramic product.

FIGURE 2.4 FLOOR PLAN

17
 Figure 2.4 shows the measurements of the building with its length of 12 meters from the

4 meters display/store area same with the back side and 8 meters of the production area and 5

meters width that consume 60 square meters of the whole building.

OFFICE FURNITURE AND FIXTURE REQUIREMENTS

The office furniture and fixture are needed to be placed in the office section for business

transaction purposes. The useful life, annual depreciation and sources are also shown in table

2.5.

TABLE 2.5 OFFICE FURNITURE AND FIXTURES

DESCRIPTION SOURCE QUANTITY UNIT COST USEFUL LIFE TOTAL COST ANNUAL DEPRECIATIO
Table Sta. Cruz Furnitures 1 pc 1500 5 1500
Wooden Chair Sta. Cruz Furnitures 1 pc 900 5 900
Cabinet Sta. Cruz Furnitures 1 pc 2500 5 2500
TOTAL 4900

Table 2.5 Office Furniture and Fixtures shows the proposed furniture and fixtures with

the useful life of 5 years, total cost of P4,900 and annual depreciation of P980.

OFFICE EQUIPMENT REQUIREMENTS

It is important to have office equipment requirements in making your day-to-day

business activity quite easy, with the help of this equipment owners get their work done faster,

and save money.

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 TABLE 2.6 OFFICE EQUIPMENT REQUIIREMENTS

DESCRIPTION SOURCE QUANTITY UNIT COST USEFUL LIFE TOTAL COST ANNUAL DEPRECIATION
Wall fan K3 center point 1 pc 1500 5 1500 300
Calculator K3 center point 1 pc 620 5 620 124
Stapler K3 center point 1 pc 80 5 80 16
TOTAL 2200 440

Table 2.6 Office Equipment Requirements shows needed office equipment with the useful life of

5 years, total cost of P2,200 and annual depreciation of P440.

OFFICE SUPPLIES REQUIREMENTS

Office supplies is needed to keep all the important files or transaction in every operating

in the business. Having the right office supplies is essential for the day to day running of the

business. It is necessary to choose a good quality that what is desire and make it sure that the

chosen items can fit for the job.

TABLE 2.7 OFFICE SUPPLIES COST

DESCRIPTION SOURCE QUANTITY UNIT COST TOTAL COST

Ball pen (HBW) K3 center point 1 box 68 68
Bond Paper K3 center point 1 ream 220 220
Trash can Unicity 1 pc 300 300
Dust pan Unicity 1 pc 60 60
Record book K3 center point 1 pc 75 75
Broom K3 center point 2 pcs 150 300
Staple wire Novo-Unite General Merchandise 1 box 32.5 32.5
Scotch tape Novo-Unite General Merchandise 2 pcs 20 40
Scissor K3 center point 2 pcs 55 110
Carbon K3 center point 2 pcs 8 16
Temporary receipt K3 center point 2 pcs 30 60
News Paper Goldland Printing Press 10 kgs 15 150
TOTAL COST 1431.5

Table 2.7 Office Supplies Cost shows the needed supplies of the business, the unit cost,

the sources and also the quantity of the proposed business with the total cost of P1,554.

19
PROJECTED OFFICE SUPPLIES

The projected costs for office supplies are increased by 5% annually from the year 2022-

2026 that are shown in table 2.9. Based on the results, it is estimated to increase about 5

percent of the cost annually.

TABLE 2.8 OFFICE SUPPLIES PROJECTION

YEAR OFFICE SUPPLIES COST

2022 1431.5
2023 1503.075
2024 1578.22875
2025 1657.140188
2026 1739.997197

Table 2.8 Office Supplies Projection shows the office supplies cost for the consecutive

five year from year 2022 up to 2026. The office supplies cost from the year 2022 was gathered

from the total cost supplies which is 1,536 and then multiplied by 5% to get the office supplies

cost for the year 2023 and the process will also be the same for the year 2022-2026.

20
 CHAPTER 3
MARKETING FEASIBILITY
MARKET ENVIRONMENT
As part of the marketing planning process, the marketing environment is taken into

account and analyzes numerous internal and external variables that could have an impact on a

business and its ability to function. This can include factors like suppliers, consumers, and

competitors, as well as technical and cultural pressures.

As ceramic production which specialize pottery will be viable and profitable. In the said

location of the proposed business is abundant in resources like sand, water and clay that will

use in creating the product. The possible consumers are housewife, miners,

“plantitas/“plantitos”, restaurant/carenderia owners, etc.

COMPETITION

In business, competition is always present. But competition encourages business to

operate more profitably and at lower costs. However, when there is less competition, as occurs

when one company buys out the majority of rivals or when rivals agree on prices, prices are

likely to go up and quality is likely to decline.

The location of the proposed business location has three groups having a business of

pottery which can be one of the rivals of the ceramic production, but despite of its competitors

the proposed business will be competitive and innovative to achieve its objectives and goals.

Competitors outside the town should concentrate on marketing and manufacturing as well as

those in the same area.

Direct Competitors

21
 Finding a gap in the market and understanding competitors' strengths and shortcomings

in relation to the business is the goal of a competitor study. Because it will show how to

strengthen the business plan. The following table are the direct competitors:

TABLE 3.0 DIRECT COMPETITORS

COMPETITORS ADDRESS
Tajale’s Pottery P-1 Bugas-bugas, Placer, Surigao del Norte
Bugas-bugas Ceramic MakP-1 Bugas-bugas, Placer, Surigao del Norte
Mapinhag’s Pottery P-3 Bugas-bugas, Placer, Surigao del Norte

Indirect Competitors

In indirect competitors, businesses that target the same demographic of clients but

providing somewhat different goods and services are said to be indirect rivals. These are

occasionally referred to as alternatives. The following below are the indirect competitors:

TABLE 3.1 INDIRECT COMPETITORS

COMPETITORS ADDRESS
B-Zem Tile Center 3315 Borromeo St., Surigao City, Surigao del Norte
JB-Builders Hardware and Construction Supplies Brgy. Luna, Surigao City, Surogao del Norte
CitiHardware Surigao Brgy. Luna, Surigao City, Surogao del Norte
Mariwasa Siam Ceramics Incorporated Borromeo St., Surigao City, Surigao del Norte
GA Woodcraft (Philippine Century) Gimena St., Surigao City, Surigao del Norte

INDUSTRY

The Ceramic Production is belong to the manufacturing industry as it refers to the

processing of raw materials or parts into finished goods through the use of tools, human labor,

machinery, and chemical processing.

Manufacturing allows businesses to sell finished products at a higher cost than the

value of the raw materials used. Large-scale manufacturing allows for goods to be mass-

produced using assembly line processes and advanced technologies as core assets. Efficient

22
manufacturing techniques enable manufacturers to take advantage of economies of scale,

producing more units at a lower cost.

The fundamental chemical idea that underlies the production of ceramics is based on the

structural and chemical conversion of clay minerals into spinel-type minerals. Refractories,

abrasives, bearings, and components that are resistant to heat and wear are all used in

industrial settings. The manufacture of goods in industries including metallurgy, chemical,

mechanical, and energy production is supported by the usage of ceramics and glass in several

industrial applications.

Human beings appear to have been making their own ceramics for at least 26,000

years, subjecting clay and silica to intense heat to fuse and form ceramic materials. The earliest

found so far were in southern central Europe and were sculpted figures, not dishes.  The

earliest known pottery was made by mixing animal products with clay and baked in kilns at up to

800°C.

Heat-resistant or refractory materials are produced as a result of the high temperatures

used in ceramic production. The term "traditional ceramics" describes ceramic items made from

unprocessed clay and blends of refined clay and non-plastic minerals that are ground or

powdered. In the proposed business product, the raw materials including sand, water and fine

sand, it gradually mixes until the good texture are being perform.

MARKETING AND SALES STRATEGY

The most important aspect in the business is the satisfaction of the consumers. To reach

the desired consumers, the proponents are using social media flat forms particularly facebook,

also radios, website, and advertisement. By these, the proponents strongly believe that will get

costumer relationship as marketing continues.

23
BUSINESS MODEL

Ceramic Production is a selling pottery either a cooking pot and flower pot which provide

unique and a quality product that will attract the customer. The strategy to be used justifies the

business model approach to be employed for the business operational and financial success.

The strategy for financial success of the business is called a business model. It outlines how to

satisfy consumers' needs while charging a fair price. The target market, the items or services

that intend to sell, and any necessary fees are all included in this. A variety of cost and income

stream structures can be tested, experimented with, and modelled by business owners.

For those who are just starting out, investigating possible business models can help

ascertain whether the business idea is viable, draw in investors, and direct the entire

management strategy. It provides a framework for creating financial predictions for established

firms as well as a benchmark for analyzing company plans and milestones. This business model

is called the bricks and clicks business model it is a business model by which a company

integrates both offline (bricks) and online (clicks) presences.

CHANNEL OF DISTRIBUTION

FIGURE 3.0 CHANNEL OF DISTRIBUTION

MANUFACTURING

WHOLESALER RETAILER CONSUMER

24
 Figure 3.0 Channel of Distribution, a proposed business employs a channel of

distribution to get a good or service into the hands of a customer as quickly and effectively as

feasible.

TABLE 3.2 HOUSEHOLD POPULATION OF SURIGAO DEL NORTE

HOUSEHOLD POPULATION IN
YEAR (1)
SURIGAO DEL NORTE
PAST
2017 511135
2018 523402
2019 535963
2020 548827
2021 561999
PROJECTED
2022 575487
2023 589298
2024 603442
2025 617924
2026 632754

Table 3.2 shows the household population from 2018 up to 2022 and it's projected year starts from

2023 up to 2027. To calculate the annual Percent rate, the proponents using the formula PR=(Vpresent-

Vpast)/Vpast×100. Then simplify it using the formula and the result is 2.4%.

DEMAND

The technique of estimating and predicting future consumer demand for a good or

service is known as demand forecasting. It involves applying predictive analysis of past data.

Demand forecasting assists the company in making more informed supply choices that predict

the overall volume of sales and revenue over the next few months.

25
 TABLE 3.3 PROJECTED DEMANDS

DEMAND IN
YEAR (1) DEMAND (2)
PIECES
PAST
2017 153,341 460,022
2018 157,021 471,062
2019 160,789 482,367
2020 164,648 493,944
2021 168,600 505,799
PROJECTED
2022 172,646 517,938
2023 176,789 530,368
2024 181,033 543,098
2025 185,377 556,132
2026 189,826 569,479

Table 3.3 shows the projected demands from year 2017 153,341 to year 2026 of

189,826. It calculated by multiplying the 30% and the annual population that result the projected

demand which shows the table above and multiply by 3 as demand in pieces.

SUPPLY

Supply is predictions about how much product will be available when based on

information about your suppliers, including whether they deliver finished goods or parts that are

assembled further down the supply chain.

26
 TABLE 3.4 PROJECTED SUPPLIES

SUPPLIES IN
YEAR SUPPLIES
PIECES
Past
2017 76,670 153,341
2018 78,510 157,021
2019 80,394 160,789
2020 82,324 164,648
2021 84,300 168,600
Projected
2022 86,323 172,646
2023 88,395 176,789
2024 90,516 181,033
2025 92,689 185,377
2026 94,913 189,826

Table 3.4 projected supplies, the annual population is divided by estimated 50% and

then multiply by 2 as supplies in pieces.

DEMAND AND SUPPLY GAP

It is an essential part of this study because it helps to identifying the needs of the target

consumer, it also gives the data whether the target consumer have capacity to avail. It is varied

year after year based on the population growth.

27
 TABLE 3.5 PROJECTED DEMAND AND SUPPLY GAP

DEMAND OF
YEAR POPULATION DEMAND IN PIECES SUPPLY IN PIECES D/S GAP
UNSATISFIED
  [1] [2] [3] [4=2-3] [5=[4/2*100]]
PAST
2017 511,135 460,022 153,341 306,681 67%
2018 523,402 471,062 157,021 314,041 67%
2019 535,963 482,367 160,789 321,578 67%
2020 548,827 493,944 164,648 329,296 67%
2021 561,999 505,799 168,600 337,199 67%
PROJECTED
2022 575,487 517,938 172,646 345,292 67%
2023 589,298 530,368 176,789 353,579 67%
2024 603,442 543,098 181,033 362,065 67%
2025 617,924 556,132 185,377 370,754 67%
2026 632,754 569,479 189,826 379,652 67%

PRODUCTION

Having a production is important in the fact that consumers needs products to satisfy

their needs and wants although economy begins with production because any increase of

production leads to economic growth as measured by GDP.

TABLE 3.6 PRODUCTION TABLE

PRODUCTION
MELTING POT COOKING POT FLOWER
YEAR TOTAL
FOR GOLD (REGULAR SIZE) POT
2022 12,000 3,840 2,400 18,240
2023 14,400 4,800 3,120 22,320
2024 16,800 5,760 3,840 26,400
2025 19,200 6,720 4,560 30,480
2026 21,600 7,680 5,280 34,560
TOTAL PRODUCTION (IN PIECES) 132,000

28
 Table 3.7 shows the annual production table, for melting pot the proponents added 50

pieces every week, 20 pieces for cooking pot and 15 pieces for flower pot. Here is the formula

(Production = weekly x 4 weeks x 12 months).

MARKET SHARE

It is important to have this market share because it is used to give an idea of how large,

powerful or important the business is. It emphasizes how much of the market a business can

realistically expect to win. The table below shows how projected market share goes.

TABLE 3.7 PROJECTED MARKET SHARE

PROJECTED SUPPLY +
VARIETY YEAR PRODUCTION MARKET SHARE %
PRODUCTION
  [1] [2] [3] (4=2/3)
2022 12,000 184,646 6%
MELTING 2023 14,400 191,189 8%
POT FOR 2024 16,800 197,833 8%
GOLD 2025 19,200 204,577 9%
2026 21,600 211,426 10%
         
2022 3,840 176,486 2%
COOKING 2023 4,800 181,589 3%
POT
2024 5,760 186,793 3%
(REGULA
R SIZE) 2025 6,720 192,097 3%
2026 7,680 197,506 4%
         
2022 2,400 175,046 1%
2023 3,120 179,909 2%
FLOWER
2024 3,840 184,873 2%
POT
2025 4,560 189,937 2%
2026 5,280 195,106 3%

Table 3.8 shows the projected market share by dividing the production and the total sum

of projected supply and production.

29
SALES REVENUE

It is an income that company incurred from selling the product or services. It is the

starting point to determine the net income. In the table below the selling price are increasing

every year.

TABLE 3.9 SALES PROJECTION

VARIETY YEAR SELLING PRICE QUANTITY SOLD SALES REVENUE

2022 20 12,000 240000
2023 25 14,400 360000
MELTING
2024 30 16,800 504000
POT
2025 35 19,200 672000
2026 40 21,600 864000

2022 100 3,840 384000

2023 100 4,800 480000
COOKING
2024 110 5,760 633600
POT
2025 120 6,720 806400
2026 130 7,680 998400

2022 250 2,400 600000

2023 270 3,120 842400
FLOWER POT 2024 300 3,840 1152000
2025 320 4,560 1459200
2026 350 5,280 1848000

Table 3.9 shows the annual sales projection by multiplying the selling price and the

production/quantity sold.

PRICING ANALYSIS

It determines how prices affect the growth of certain businesses. It should have an

examining and evaluating the proposed price.

30
 TABLE 3.10 PRICING ANALYSIS

VARIETY RAW DESCRIPTION AMOUNT

Salary 168000
Raw Materials 8880
Water and Electric Bill Expenses 7800
Total Operating cost 184680
MELTING POT
Total Production Annually (per piece) 12000
Cost Price 15.39
Mark-up (129.9545159%) 4.61
Unit Selling 20

Salary 168000
Raw Materials 10080
Water and Electric Bill Expenses 7800
Total Operating cost 185880
COOKING POT
Total Production Annually (per piece) 3840
Cost Price 48.40625
Mark-up (206.5848935%) 51.59375
Unit Selling 100

Salary 168000
Raw Materials 14880
Water and Electric Bill Expenses 7800
Total Operating cost 190680
FLOWER POT
Total Production Annually (per piece) 2400
Cost Price 79.45
Mark-up (314.6633103%) 170.55
Unit Selling 250

Table 3.10 presents the pricing analysis of ceramic production based on the numbers of product

produced annually. The total operating cost is gathered through adding the amount of the salary

raw materials and water an electric bill expenses with the total cost of P128,360.00.

INVENTORY COSTING

Inventory costs are the expenses a company incurs when it keeps stock or has money

locked up in inventory. The company seeks to establish the order size that will reduce the

overall inventory expenses by calculating the most economical order quantity.

31
 TABLE 3.11 INVENTORY COSTING

YEAR PRODUCTION IB GAS IE QS CP

1 2 (3=1+2) (4=1*5%) (5=3-4) 6
2022 12,000 ­ 12000 600 11400 15.39
2023 14,400 600 15000 720 14280 15.39
2024 16,800 720 17520 840 16680 15.39
2025 19,200 840 20040 960 19080 15.39
2026 21,600 960 22560 1080 21480 15.39

2022 3,840 ­ 3840 192 3648 48.40625

2023 4,800 192 4992 240 4752 48.40625
2024 5,760 240 6000 288 5712 48.40625
2025 6,720 288 7008 336 6672 48.40625
2026 7,680 336 8016 384 7632 48.40625

2022 2,400 ­ 2400 120 2280 79.45

2023 3,120 120 3240 156 3084 79.45
2024 3,840 156 3996 192 3804 79.45
2025 4,560 192 4752 228 4524 79.45
2026 5,280 228 5508 264 5244 79.45

Table 3.11 shows the inventory cost for five years. The cost is presented according to its

specific period of time, these are the cost that are induced upon the maintenance of the

inventory as time goes by.

32
 CHAPTER 4

TECHNICAL FEASIBILITY

PRODUCT DESCRIPTION

FIGURE 4.0 PRODUCT DESCRIPTION

Ceramic pots are made by forming a ceramic (often clay) body into objects of a desired

shape and heating them to high temperatures, in a bonfire, pit or kiln an induces reactions that

lead to permanent changes including increasing the strength and rigidity of the object.

Ceramic production that specialize cooking pot, vases and bowl. Cooking pot can be

used to prepare a variety of dishes, including pasta, and tinola. Particularly pots are frequently

used to prepare foods with a lot of liquid, like stews, soups, sauces, or stocks. Vases are often

decorated, and they are often used to hold cut flowers. Vases come in different sizes to support

whatever flower it is holding or keeping in place. Vases generally share a similar shape. The

33
foot or the base may be bulbous, flat, carinate, or another shape. And bowls are versatile tools

in the kitchen which help us to handle and prepare food.

PRODUCTION PROCESS

Materials:

 Clay

 Water

 Sand

Procedure:

1. Create ceramic production concept.

2. Gather the raw materials need.

3. Combine the sand and clay together with the small amount of water.

4. Gradually mix the raw materials until it gets the perfect texture.

5. Divide the combine texture and form it to the desire shapes.

6. Let it dry until it is ready to serve into the cooking process.

7. After the cooking process, cool it down.

8. Polish the product.

9. Ready to sell/display.

WORKFLOW PROCESS

34
PRODUCTION REQUIREMENTS

The processes involved in transforming inputs into a finished product that can be sold on

the market are collectively referred to as production requirements. Resource use is a

requirement for the proponents in order to carry out production activities.

The production of ceramics requires the use of raw materials, machinery, equipment,

water, and electricity.

COST BUILDING REQUIREMENTS

The processing of the product, the inventory of the raw materials required for the

production, the equipment tools to be used, and the production capacity are the main focuses of

the production requirements. The building requirements shows in table 2.4 Building construction

cost requirements that indicates the materials needs in order to have a ceramic production

building. Business building has rocketed to the top of the corporate agenda. It shows the way

35
forward whether your business has to diversify its revenue streams, boost organic growth, avoid

disruption, or quickly adapt to the changing needs of both its current and potential customers.

Furthermore, this include the requirement of the mechanism that are needed and will be

used to accomplish the production.

PRODUCTION FURNITURE AND FIXTURE

Furniture such as tables, chairs and cabinets are objects that use in production. These

objects make suitable for Ceramic Production as well as fixture like ceiling fan. The table below

shows the production furniture and fixture requirements.

TABLE 4.O PRODUCTION FURNITURE AND FIXTURES

UNIT TOTAL ANNUAL

DESCRIPTION SOURCE QTY LIFE
COST COST DEPRECIATION

Table Nene 3 Pcs 1,500 4,500 5 225

Chair 2 Pcs 500 1,000 5 50
Cabinet 2 Pcs 2,000 4,000 5 200
Wall Fan 1 Pcs 1,500 1,500 5 75
Total Production Furniture and Fixture 11,000 550

Table 4.0 shows the production furniture and fixtures that includes tables, chairs,

cabinets and ceiling fan with the useful life of 5 years and total cost of P11,000.

PRODUCTION EQUIPMENT REQUIREMENTS

It is necessary to have an equipment in making a product because it is a way were the

product to be made and with the help of this equipment it makes the works much easier and

faster.

TABLE 4.1 PRODUCTION EQUIPMENT REQUIREMENTS

36
 SOURCE QTY UNIT COST TOTAL COST USEFUL LIFE ANNUAL DEPRECIATION
Amaneo Hardware 2 pcs 520.00 1,040.00 3 347
Amaneo Hardware 1 pc 1,500.00 1,500.00 5 300
Shopee 2 pcs 1,500.00 3,000.00 5 600
otal Production Equipment Cost 5,540.00 1,247

Table 4.1 shows the Production Equipment Requirements the needs for ceramic

production which indicates the sand screening rotary sieve, metal kiln and pottery wheel with

the total cost of P4,040 and annual depreciation of P2,562.

RAW MATERIALS REQUIREMENTS

Production machinery and equipment: These are the tools required to manufacture the

good or render the service.

Production materials: These are the primary materials need to create a good or finish a

task. Production materials come in two varieties: direct materials and indirect materials. The

materials that are used in, or are directly connected to, the product or service you produce are

referred to as direct materials. To manufacture a product or finish a service, some materials are

referred to as indirect materials. These materials are typically used in modest quantities.

TABLE 4.2 RAW MATERIALS REQUIREMENTS

37
 RAW MATERIALS
DESCRIPTSOURCE QUANTITY UNIT COS AMOUNT
Melting Pot for Gold
Sand 2 Sack 30 60
Clay 5 Sacks 25 125
Water 3 Gals -
Cooking Pot
Sand 2 Sacks 30 60
Clay 6 Sacks 25 150
Water 3 Gals -
Flower Pot
Sand 2 Sacks 30 60
Clay 10 Sacks 25 250
Water 3 Gals -
Total Raw Materials Cost 705

Table 4.2 raw materials requirements is shows above. The quantity of the raw materials

is equivalent of 10 pieces that includes clay, sand and water.

TABLE 4.3 PROJECTED COSTS OF RAW MATERIALS

YEAR PROJECTED COST

2022 33,840
2023 35,532
2024 37,309
2025 39,174
2026 41,133

Table 4.3 shows the projected costs of raw materials from 2021 to 2025. In getting the

projected cost, the total raw materials which are the indicated quantity is equivalent of 10 pieces

multiplied by production.

PRODUCTION SUPPLIES REQUIREMENTS

Production supplies requirements encompass the required supplies for production

process. This are the needed supplies that will be used upon the absence of the same supply.

Thus, it serves as the supporting or duplicate supplies.

TABLE 4.4 PRODUCTION SUPPLIES REQUIREMENTS

38
 DESCRIPTION SOURCE QTY UNIT PRICE TOTAL COST
Potters Apron Unicity 3 pcs 75.00 225.00
Sponge Unicity 3 pcs 12.00 36.00
Trimming tools Palma Enterprises 2 sets 349.00 698.00
Potters needle Palma Enterprises 4 pcs 68.00 272.00
A cut of wire Visayan Marketing 2 pcs 30.00 60.00
Small Pail (for holding wat Unicity 3 pcs 25.00 75.00
Wooden rib Palma Enterprises 2 sets 677.00 1,354.00
Knives Palma Enterprises 2 pcs 110.00 220.00
Sacks Amaneo’s Hardware 10 pcs 20.00 200.00
Ceramic Shaping tools Shopee 2 sets 500.00 1,000.00
Stone Aloyon’s Store 2 pcs 5.00 10.00
Bottle Aloyon’s Store 2 pcs 5.00 10.00
Total Production Supply Cost 4,160.00

Table 4.4 production supplies requirements show supplies with its quantity, price and

total cost which result the total production supply cost of P4,160.

TABLE 4.5 PROJECTED PRODUCTION SUPPLIES

YEAR PROJECTED SUPPLIES

2022 4,160
2023 4,368
2024 4,586
2025 4,816
2026 5,057

Table 4.5 projected production supplies shows the annually cost from the year 2021 up

to 2025. The projected supply is from the total production supply cost of P4,160 multiplied by

5%.

WATER CONSUMPTION

This proposed business has utility requirements that include water that is needed for the

production of ceramic. To ensure the safety of the product, water is highly needed in cleaning all

the production equipment.

39
 TABLE 4.6 PROJECTED WATER CONSUMPTION

ANNUAL WATER ADMINISTRATIVE PRODUCTION

YEAR CONSUMPTION (30%) (70%)
2022 3000 900 2100
2023 3150 945 2205
2024 3308 992 2315
2025 3473 1042 2431
2026 3647 1094 2553

Table 4.6 above shows the projected water consumption from 2021 up to 2025. The annual

water consumption is divided by two categories, the Administrative of 30% and Production of

70%.

ELECTRICITY CONSUMPTION

The proposed business includes electricity that is necessary in making a ceramic

production, especially during night time and at any activities in the workplace that is needs to

have light.

TABLE 4.7 PROJECTED ELECTRIC CONSUMPTION

ANNUAL ELECTRIC ADMINISTRATIVE PRODUCTION

YEAR
CONSUMPTION (50%) (50%)
2022 5,400 2,700 2,700
2023 5,670 2,835 2,835
2024 5,954 2,977 2,977
2025 6,251 3,126 3,126
2026 6,564 3,282 3,282

Table 4.7 above shows the projected water consumption from 2021 up to 2025. The

annual electric consumption is divided by two categories, the Administrative of 30% and

Production of 70%.

40
 CHAPTER 5

TABLE 5.0 TOTAL PROJECT COST

41
 Cost Category Description Total Cost

Fees and Permits

Brgy. Clearance 150.00
Mayor's Permit/Business 180.00
BIR Registration 500.00
Certificate of Business 500.00
Sanitary Permit 100.00
1,430.00
-
Administrative -
Construction 97,021.00
Lease for Lot 7,000.00
Furniture and Fixtures 4,900.00
Office Equipment 2,200.00
Office Supplies 1,434.00
112,555.00
-
Production Cost -
Equipment 5,540.00
Furniture and Fixtures 11,000.00
Raw Materials 33,840.00
Supplies 4,160.00
Salary 168,000.00
222,540.00
-
PROJECT COST 336,525.00
-
Working Capital 163,475.00
-
TOTAL PROJECT COST 500,000.00

TABLE 5.1 LOAN AMORTIZATION

42
 Loan Amount: 250000
Term 6
Interest Rate: 12%
Basis: Annually
Total Principal Payment: 250000
Total Interest Paid: 180000

YEAR AMORTIZATIONPRINCIPAL INTEREST BALANCE

- 250000
1 86000 41667 44333 208333
2 86000 41667 44333 166667
3 86000 41667 44333 125000
4 86000 41667 44333 83333
5 86000 41667 44333 41667
6 86000 41667 44333 -
TOTAL 516,000.00 250,000.00 266,000.00 -

TABLE 5.2 COST OF GOODS SOLD PROJECTIONS

Ceramic Production
Statements of Cost of Good Sold Projections
For the Year Ended December 31, 2022 through 2026

Table 2023 2024 2025 2026 2027

RAW MATERIALS USED
Raw Materials Inventory, Beginning 28062 35092.5 42123 49153.5
Purchases(Raw Materials) 33840 35532 37308.6 39174.03 41132.732
Raw Materials Available for Sale 33840 63594 72401.1 81297.03 90286.232
Less:Raw Materials Inventory, End 28062 35092.5 42123 49153.5 56184
Cost of Raw Materials Used 5778 28501.5 30278.1 32143.53 34102.232
DIRECT LABOR 182000 182000 182000 182000 182000
MANUFACTURING OVERHEAD
Water Expense 4.6 2100 2205 2315 2431 2553
Electric Expense 4.7 2700 2835 2977 3126 3281.8669
Production Supplies 4.5 4160 4368 4586.4 4815.72 5056.506
Dep'n Expense-Production Equipment 4.1 1246.6667 1246.6667 1246.6667 1246.6667 1246.6667
Dep'n Expense- Production Furniture and 4 2200 2200 2200 2200 2200
Total Manufacturing Overhead 12407 12855 13325 13819 14338
TOTAL MANUFACTURING COSTS 200185 223356 225603 227963 230440
Add:Work in Process, Beg.
Total Cost of Goods Placed in Process 200185 223356 225603 227963 230440
Less:Work in Process, End
Cost of Goods Manufactured 200185 223356 225603 227963 230440
Add:Finished Goods, Beg. 28062 35093 42123 49154
Cost of Goods Available for Sale 200185 251418 260696 270086 279593
Less:Finished Goods, End 3.1 28062 35093 42123 49154 56184
COST OF GOODS SOLD 172123 216326 218573 220932 223409

TABLE 5.3 INCOME PROJECTIONS

43
 Statements of Income Projections
For the Years Ended December 31, 2022 through 2026

Table 2,023.00 2,024.00 2,025.00 2,026.00 2,027.00

Sales 3.80 1,224,000.00 1,682,400.00 2,289,600.00 2,937,600.00 3,710,400.00

Less Cost of Sold 5.20 172,122.67 216,325.67 218,572.67 220,932.02 223,409.33
Gross Profit 1,051,877.33 1,466,074.33 2,071,027.33 2,716,667.98 3,486,990.67
Less Operating Expenses:
Regulatory Fees 2.30 1,430.00 930.00 930.00 930.00 930.00
Electricity Expense 4.70 5,400.00 5,670.00 5,953.50 6,251.18 6,563.73
Water Expense 4.60 3,000.00 3,150.00 3,307.50 3,472.88 3,646.52
Interest Expense 5.10 44,333.33 44,333.33 44,333.33 44,333.33 44,333.33
Office Supplies Expense 2.80 1,434.00 1,505.70 1,580.99 1,660.03 1,743.04
SSS Contributions Expense 2.20 11,172.00 11,172.00 11,172.00 11,172.00 11,172.00
PHIC Contributions Expense 2.1, 2.2 7,560.00 7,560.00 7,560.00 7,560.00 7,560.00
HDMF Contributions Expense 2.1, 2.2 5,040.00 5,040.00 5,040.00 5,040.00 5,040.00
Depreciation Expense:
Building 2.40 97,021.00 97,021.00 97,021.00 97,021.00 97,021.00
Office Furniture and Fixtures 2.50 4,900.00 4,900.00 4,900.00 4,900.00 4,900.00
Office Equipment 2.60 2,200.00 2,200.00 2,200.00 2,200.00 2,200.00
Total Operating Expenses 183,490.33 183,482.03 183,998.32 184,540.42 185,109.62
Operating Income before Tax 868,387.00 1,282,592.30 1,887,029.02 2,532,127.57 3,301,881.04
Less: Income Tax 423,148.08 423,148.08 574,257.25 1,162,138.27 1,393,064.31
NET INCOME 445,238.93 859,444.23 1,312,771.76 1,369,989.30 1,908,816.73

TABLE 5.4 CHANGES IN EQUITY PROJECTIONS

44
 Ceramic Production
Statements of Changes in Equity Projections
For the Years Ended December 31, 2022 through 2026

Table 2023 2024 2025 2026 2027

Capital Beginning 685238.925 1529683.15 2822454.911 4167444.21
Add: Net Income 5.3 445238.925 859444.225 1312772 1369989 1908817
Initial Investment 250000
TOTAL 695238.925 1544683.15 2842454.911 4192444.207 6076260.94
Less: Personal Drawings 10000 15000 20000 25000 30000
Capital End 685238.925 1529683.15 2822454.911 4167444.207 6046260.94

TABLE 5.5 CASH FLOWS PROJECTIONS

Ceramic Production
Statement of Cash Flows Projections
For the Years Ended December 31, 2022 through 2026

Table 2023 2024 2025 2026 2027

Cash Flows from Operating Activities

Net Income 5.3 445,238.93 859444.225 1312771.761 1369989.296 1908816.731
Adjustments to reconcile net income to net cash
provided by operating activities
Income Tax
Depreciation Expense
Building 2.4 19404.2 20374.41 21393.1305 22462.78703 23585.92638
Office Furniture and Fixtures 2.5 980 1029 1080.45 1134.4725 1191.196125
Office Equipment 2.6 440 462 485.1 509.355 534.82275
Production Equipment 4.1 1247 1309 1374.45 1443.1725 1515.331125
Furniture and Fixtures 4.0 2200 2310 2425.5 2546.775 2674.11375
Increase in Accounts Receivable 5.6 (61,200.00) (22,920.00) (30,360.00) (32,400.00) (38,640.00)
Increase in Inventory 5.6 (28,062.00) (7,030.50) (7,030.50) (7,030.50) (7,030.50)
Increase in Loans Payable 5.1 (41,666.67)
Increase in Accounts Payable 5.6 8606 2210 112 118 124
Increase in SSS Contributions Payable 5.6 931
Increase in PHIC Contributions Payable 5.6 630
Increase in HDMF Contributions Payable 5.6 420
Payment of Income Tax (423,148.08) (574,257.25) (1,162,138.27)
Net Cash provided by (used in) operating activities 349,168.26 857188.285 1302252.242 1358773.326 1892771.487
Cash Flows from Investing Activities
Acquisitions of:
Building 2.4 (97,021.00)
Office Furniture and Fixtures 2.6 (2,200.00)
Office Equipment 2.6 (2,200.00)
Production Equipment 4.1 (5,540.00)
Furniture and Fixtures 4.0 (11,000.00)
Net Cash provided by (used in) investing activities (117,961.00)
Flowsfrom Financing Activities
Cash received as investment by owners 5.1 250000
Cash received from borrowing 5.1 250,000.00
Loan Payment 5.1 (41,666.67) (41,666.67) (41,666.67) (41,666.67)
Owner's personal drawings 5.4 (10,000.00) (15,000.00) (20,000.00) (25,000.00) (30,000.00)
Net cash provided by (used in) financing activities 448333.33 (56,666.67) (61,666.67) (66,666.67) (30,000.00)
Net increase/(decrease) in cash 679,540.59 800,521.62 1,240,585.58 1,292,106.66 1,862,771.49
Cash balance at the Beginning of the period 679,540.59 1,480,062.21 2,720,647.79 4,012,754.44
Cash Balance at the End of the Period 679,540.59 1,480,062.21 2,720,647.79 4,012,754.44 5,875,525.93

TABLE 5.6 FINANCIAL POSITION

45
 For the Years Ended December 31, 2023 through 2027

Table 2023 2024 2025 2026 2027

ASSETS
Current Assets
Cash on Hand 5.5 679,540.59 1,480,062.21 2,720,647.79 4,012,754.44 5,875,525.93
Accounts Receivable 5.3 61,200.00 84120 114480 146880 185520
Finished Good Inventory 5.2 28,062.00 35093 42123 49154 56184
Raw Materials Inventory 5.2 5,778.00 28501.5 30278.1 32143.53 34102.23
Total Current Assets 774,580.59 1,627,776.21 2,907,528.89 4,240,931.47 6,151,332.16
Non Current Assets
Rent renovation 2.4 77616.8 58212.6 38808.4 19404.2 0
Office Furniture and Fixtures 5 6,100.00 5120 4140 3160 2180
Office Equipment 2.6 2,200.00 1760 1320 880 440
Production Equipment 4.1 4293.33 3046.67 1800.00 553.33 -693.33
Production Furniture and Fixtures 4.0 8,800.00 6600 4400 2200 0
Total Non Current Assets 99010.13 74739.27 50468.4 26197.53 1926.67
TOTAL ASSETS 873,590.73 1,702,515.48 2,957,997.29 4,267,129.01 6,153,258.83

LIABILITIES AND OWNER'S EQUITY

Current Liabilities
Loans Payable 5.1 41667 41667 41667 41667 41667
Income Tax Payable 5.3 423148.075 423148.075 574257.2538 1162138.27 1393064.313
SSS Contributions Payable 2.2 931 931 931 931 931
PHIC constributions Payable 2.2 630 630 630 630 630
HDMF Constributions Payable 2.2 420 420 420 420 420
Accounts Payable 5.2 8606 10816.28333 10928.63333 11046.60 11170.47
Total Current Liabilities 475401.88 435945.36 587166.89 1175165.87 1406215.78
Non Current Liabilities
Loans Payable - Long Term Portion 5.1 208333 125000 83333 41667 -
Total Non Current Liabilities 208333 125000 83333 41667 -
Total Liabilities 683735.21 560945.36 670500.22 1216832.54 1406215.78
Owner's Equity 5.4 685238.93 1529683.15 2822454.91 4167444.21 6046260.94
TOTAL LIABILITIES AND OWNER'S EQUITY 1,368,974.13 3,059,366.30 3,492,955.13 5,384,276.74 7,452,476.72

TABLE 5.7 COST OF GOODS SOLD PROJECTIONS

46
 Ceramic Production
Common-size Statements of Cost of Goods Sold Projections
For the Years Ended December 31, 2023 through 2027

Table 2023 2024 2025 2026 2027

RAW MATERIALS USED

Raw Materials Inventory, Beginning 5.2 0.00% 12.97% 16.06% 19.07% 22.00%
Purchases(Raw Materials) 5.2 19.66% 16.43% 17.07% 17.73% 22.00%
Raw Materials Available for sale 5.2 19.66% 29.40% 33.12% 36.80% 40.41%
Less:Raw Materials Inventory, End 5.2 16.30% 16.22% 19.27% 22.25% 25.15%
Cost of Materials Used 3.36% 13.18% 13.85% 14.55% 15.26%
DIRECT LABOR 5.2 105.74% 84.13% 83.27% 82.38% 81.46%
MANUFACTURING OVERHEAD
Water Expense 5.2 1.22% 1.02% 1.06% 1.10% 1.14%
Electric Expense 1.57% 1.31% 1.36% 1.41% 1.47%
Production Supplies 2.42% 2.02% 2.10% 2.18% 2.26%
Dep'n Expense-Production Equipment 0.72% 0.58% 0.57% 0.56% 0.56%
Dep'n Expense-Furniture and Fixtures 1.28% 1.02% 1.01% 1.00% 0.98%
Total Manufacturing Overhead 7.21% 5.94% 6.10% 6.25% 6.42%
TOTAL MANUFACTURING COSTS 116.30% 103.25% 103.22% 103.18% 103.15%
Add:Work in Process, Beg. 0.00% 0.00% 0.00% 0.00% 0.00%
Total Cost of Goods 116.30% 103.25% 103.22% 103.18% 103.15%
Less:Work in Process, End 0.00% 0.00% 0.00% 0.00% 0.00%
Cost of Goods Manufactured 116.30% 103.25% 103.22% 103.18% 103.15%
Add:Finished Goods, Beg. 0.00% 12.97% 16.06% 19.07% 22.00%
Cost of Goods Available for Sale 116.30% 116.22% 119.27% 122.25% 125.15%
Less:Finished Goods, End 3.7 16.30% 16.22% 19.27% 22.25% 25.15%
COST OF GOODS SOLD 100.00% 100.00% 100.00% 100.00% 100.00%

47
 TABLE 5.8 INCOME PROJECTIONS

Ceramic Production
Common Size Statements of Income Projections
For the Years Ended December 31, 2023 through 2027

Table 2023 2024 2025 2026 2027

Sales 3.5 100.00% 100.00% 100.00% 100.00% 100.00%

Less Cost of Sold 14.06% 12.86% 9.55% 7.52% 6.02%
Gross Profit 85.94% 87.14% 90.45% 92.48% 93.98%
Less Operating Expenses:
Regulatory Fees 2.3 0.12% 0.06% 0.04% 0.03% 0.03%
Electricity Expense 4.7 0.44% 0.34% 0.26% 0.21% 0.18%
Water Expense 4.6 0.25% 0.19% 0.14% 0.12% 0.10%
Interest Expense 5.1 3.62% 2.64% 1.94% 1.51% 1.19%
Office Supplies Expense 2.9 0.12% 0.09% 0.07% 0.06% 0.05%
SSS Contributions Expense 2.2 0.91% 0.66% 0.49% 0.38% 0.30%
PHIC Contributions Expense 2.2 0.62% 0.45% 0.33% 0.26% 0.20%
HDMF Contributions Expense 2.2 0.41% 0.30% 0.22% 0.17% 0.14%
Depreciation Expense:
Building 2.4 7.93% 5.77% 4.24% 3.30% 2.61%
Office Furniture2.6
and Fixtures 0.40% 0.29% 0.21% 0.17% 0.13%
Office Equipment2.7 0.18% 0.13% 0.10% 0.07% 0.06%
Operating Expenses 14.99% 10.91% 8.04% 6.28% 4.99%
Operating Income before Tax 70.95% 76.24% 82.42% 86.20% 94.69%
Less:Income Tax 5.14 34.57% 25.15% 25.08% 39.56% 37.54%
NET INCOME 36.38% 51.08% 57.34% 46.64% 51.45%

TABLE 5.9 CHANGES IN EQUITY

Common Size Statements of Changes in Equity

For the Years Ended December 31, 2023 through 2027

Table 2023 2024 2025 2026 2027

Capital Beginning 5.4 100.00% 54.20% 67.73% 68.93%
Add: Net Income 5.4 64.98% 56.18% 46.51% 32.87% 31.57%
5.4
Initial Investment 36.48%
TOTAL 101.46% 100.98% 100.71% 100.60% 100.50%
Less: 5.4
Personal Drawings 1.46% 0.98% 0.71% 0.60% 0.50%
Capital End 100.00% 100.00% 100.00% 100.00% 100.00%

48
 TABLE 5.10 FINANCIAL POSITION PROJECTIONS

Ceramic Production
Statements of Financial Position Projections
For the Years Ended December 31, 2023 through 2027

Table 2023 2024 2025 2026 2027

ASSETS
Current Assets
Cash on Hand 5.6 686.33% 94.75% 96.76% 97.60% 98.07%
Accounts Receivable 5.6 61.81% 5.03% 3.15% 2.35% 1.91%
Inventory 5.6 28.34% 0.06% 0.04% 0.03% 0.02%
Total Current Assets 776.49% 99.84% 99.94% 99.98% 100.00%
Non Current Assets
Renovation 5.6 78.39% 0.10% 0.04% 0.01% 0.00%
Office Furniture and Fixtures 5.6 6.16% 0.02% 0.01% 0.00% 0.00%
Office Equipment 5.6 2.22% 0.02% 0.01% 0.00% 0.00%
Production Machineries and Equipment 5.6 4.34% 0.01% 0.00% 0.00% 0.00%
Production Furniture and Fixtures 5.6 8.89% 0.01% 0.00% 0.00% 0.00%
Total Non Current Assets 100.00% 0.16% 0.06% 0.02% 0.00%
TOTAL ASSETS 876.49% 100.00% 100.00% 100.00% 100.00%

LIABILITIES AND OWNER'S EQUITY

Current Liabilities
Loans Payable 5.6 0.00% 0.00% 0.00% 0.00% 0.00%
Income Tax Payable 5.6 0.00% 32.61% 20.56% 15.45% 12.64%
SSS Contributions Payable 5.6 0.58% 0.01% 0.00% 0.00% 0.00%
PHIC constributions Payable 5.6 0.55% 0.01% 0.00% 0.00% 0.00%
HDMF Constributions Payable 5.6 0.37% 0.01% 0.00% 0.00% 0.00%
Accounts Payable 5.6 3.98% 0.06% 0.04% 0.02% 0.02%
Total Current Liabilities 5.48% 32.69% 20.60% 15.49% 12.66%
Non Current Liabilities 0.00% 100.00% 200.00% 300.00% 400.00%
Loans Payable - Long Term Portion 5.6 35.47% 0.35% 0.10% 0.00% 0.00%
Total Liabilities 40.95% 33.04% 20.70% 15.49% 12.66%
Owner's Equity 5.6 59.05% 66.96% 79.30% 84.51% 87.34%
TOTAL LIABILITIES AND OWNER'S EQUITY 100.00% 100.00% 100.00% 100.00% 100.00%

49
 TABLE 5.11
CERAMIC PRODUCTIONS
Statement of Cash Flows Projections
For The Years Ended December 31, 2023 through 2027

Table 2023 2024 2025 2026 2027

Cash Flows from Operating Activities

Net Income 5.5 65.52% 58.07% 48.25% 34.14% 32.49%
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation Expenses
Building 5.5 2.86% 1.38% 0.79% 0.56% 0.40%
Office Furniture and Fixtures 5.5 0.14% 0.07% 0.04% 0.03% 0.02%
Office Equipment 5.5 0.06% 0.03% 0.02% 0.01% 0.01%
Production Furniture& fixtures 5.5 0.18% 0.09% 0.05% 0.04% 0.03%
Production Equipment 5.5 0.32% 0.16% 0.09% 0.06% 0.05%
Increase in Accounts Receivable 5.5 -9.01% -1.55% -1.12% -0.81% -0.66%
Increase in Inventory 5.5 -4.13% -0.48% -0.26% -0.18% -0.12%
Increase in Loans Payable -6.13% 0.00% 0.00% 0.00% 0.00%
Increase in Accounts Payable 5.5 1.27% 0.15% 0.00% 0.00% 0.00%
Increase in SSS Contributions Payable 5.5 0.14% 0.00% 0.00% 0.00% 0.00%
Increase in PHIC Contributions Payable 5.5 0.09% 0.00% 0.00% 0.00% 0.00%
Increase in HDMF Contributions Payable 5.5 0.06% 0.00% 0.00% 0.00% 0.00%
Payment of Income Tax 5.5 0.00% 0.00% -15.55% -14.31% -19.78%
Net cash provided by (used in)operating activities 51.38% 57.92% 32.31% 19.55% 12.44%
Cash Flows from Investing Activities
Acquisitions of:
Building 5.5 -14.28% 0.00% 0.00% 0.00% 0.00%
Office Furniture and Fixtures 5.5 -0.32% 0.00% 0.00% 0.00% 0.00%
Office Equipment 5.5 -0.32% 0.00% 0.00% 0.00% 0.00%
Production Equipment 5.5 -0.82% 0.00% 0.00% 0.00% 0.00%
Production Furniture and Fixtures -1.62% 0.00% 0.00% 0.00% 0.00%
Net cash provided by (used in) investing activities -17.36% 0.00% 0.00% 0.00% 0.00%
Cash Flows from Finacing Activities
Cash received as investments by owners 5.5 36.79% 0.00% 0.00% 0.00% 0.00%
Cash received from borrowings 5.5 36.79% 0.00% 0.00% 0.00% 0.00%
Loan PaymentS 5.5 -6.13% -2.82% -1.53% -1.04% 0.00%
Owner's personal drawings -1.47% -1.01% -0.74% -0.62% -0.51%
Net cash provided by (used in) financing activities 65.98% -3.83% -2.27% -1.66% -0.51%
Net increase/(decrease) in cash 100.00% 54.09% 45.60% 32.20% 31.70%
Cash Balance at the Beginning of the Period 0.00% 45.91% 54.40% 67.80% 68.30%
Cash Balance at the End of the Period 100.00% 100.00% 100.00% 100.00% 100.00%

50
 TABLE 5.12 FINANCIAL STATEMENT ANALYSIS
Ceramic Production
Financial Statement Analysis
For the Projected Years Ended December 31, 2023 through 2027

2023 2024 2025 2026 2027

Liquidity Ratios
Current Ratio current assets 0.57 0.53 0.83 0.79 0.83
current liabilities

Quick Ratio quick assets 0.56 0.52 0.82 0.78 0.82

current liabilities

Profitability Ratios
Return on Total Assets net income 0.51 0.50 0.44 0.32 0.31
total assets

Return on Sales net income 0.36 0.51 0.57 0.47 0.51

sales

Return on Equity net income 0.65 0.56 0.47 0.33 0.32

equity
TABLE 5.13 BREAK-EVEN ANALYSIS
Ceramic Production
Break-Even Analysis
For the Years Ended December 31,2023 through 2027
Melting Pot
Table
Asumptions
Selling Price: 3.9 20.00
Variable Cost 3.9 15.39
Fixed Cost 5.3 868,387.00

Calculated Break-Even
Break-Even Sales Revenue 3,767,405.64
Break-Even Sales Units 188,370.28

Profit and Loss Statement

Sales Units 188,370.28
Sales 3,767,405.64
Less: Cost of Goods Sold 2,899,018.64
Gross Profit 868,387.00
Less: Fixed Costs 868,387.00
Net Profit -

51
 Ceramic Production
Break-Even Analysis
For the Years Ended December 31,2023 through 2027
Cooking Pot
Table
Asumptions
Selling Price: 3.9 100.00
Variable Cost 3.9 48.41
Fixed Cost 5.3 868,387.00

Calculated Break-Even
Break-Even Sales Revenue 1,683,124.41
Break-Even Sales Units 16,831.24

Profit and Loss Statement

Sales Units 16,831.24
Sales 1,683,124.41
Less: Cost of Goods Sold 814,737.41
Gross Profit 868,387.00
Less: Fixed Costs 868,387.00
Net Profit -

Ceramic Production
Break-Even Analysis
For the Years Ended December 31,2023 through 2027
Flower Pot
Table
Asumptions
Selling Price: 3.9 250.00
Variable Cost 3.9 79.45
Fixed Cost 5.3 868,387.00

Calculated Break-Even
Break-Even Sales Revenue 1,272,921.43
Break-Even Sales Units 5,091.69

Profit and Loss Statement

Sales Units 5,091.69
Sales 1,272,921.43
Less: Cost of Goods Sold 404,534.43
Gross Profit 868,387.00
Less: Fixed Costs 868,387.00
Net Profit -

52
 TABLE 5.14 INCOME TAX COMPUTATION

Ceramic Production
Income Tax Computation
For the Years Ended December 31, 2023 through 2027

Table 2023 2024 2025 2026 2027

Taxable Income 5.3 868387 1282592 1887029 2532128 3301881
On 516,000.00 102,500.00 On 516,000.00 102500 On 516000 102500 516000 402500 516000 402500
On excess 352,387.00 217,096.75 On excess 766592 320648.1 On excess 1371029 471757.3 2016128 759638.3 2785881 990564.3
Tax Payable 319,596.75 423148.1 574257.3 1162138 1393064

53
 CHAPTER 6

SOCI-ECONOMIC FEASIBILITY

The socio-economic viability is used to evaluate the project's social, economic, and

environmental effects on society. It is often employed to determine whether a project's or study's

social, economic, and environmental implications are appropriate. To see

REGULATIONS/ENVIRONMENTAL ISSUES

BPS Product Certification Scheme

The Ceramic Production that specify vase or flower pot, cooking pot and melting pot for

gold, is also under the DTI’s Bureau of Product Standards. DTI’s Bureau of Product

Standards lists ceramic as among the products for mandatory certification under

mechanical/building and construction materials.

The certification of ceramic are guided by the Philippine Standard (PS) Quality and/or

Safety Certification Mark Scheme and the implementing guidelines for the mandatory

certification of ceramic production.

PNS for Ceramic

As to environmental pollution which is the most significant problem throughout the world.

As the world is witnessing the rapid urbanization and industrialization, the need for energy and

waste discharges are in an increasing trend. The waste discharge in any form (liquid or gas)

causes a severe health problem, greenhouse gas emissions, water pollution and acid rain. In

order to cater to the needs of the growing population, various industries have been started and

manufacturing different products. These industries procure raw materials, process them and

produce the finished products 316 M. Muthukannan, A.S. Chithambar Ganesh Catalina

Research (2007).

54
 The major processes of manufacturing the ceramic are mixing and grinding, forming,

firing and glazing. After glazing, the ceramic products are checked for quality and packed.

The Environmental Impact of Ceramic Production is the firing which is part of the

process of making one product that can affect the ozone layer because of the heat releases.

Also, the consumption of the local clay that might deepen the local river years of operations. But

aside from that, no water contamination will involve because raw materials are all natural and

can not damage the water creatures and plants.

CONTRIBUTION TO THE PHILIPPINE ECONOMY

The Ceramic Production aspires to be composed of productive, aggressive,

environmentally friendly, profitable, and profitable producers who contribute to society and to the

economic development of the nation.

It aims to boost the industry's environmental awareness while preserving its

competitiveness, making its products the top pick of local consumers, and assuring its financial

success.

Aside from that, Pottery plays an important role in studying culture and reconstructing

the past. Historically with distinct culture, the style of pottery changed. It reflects the social,

economic and environmental conditions a culture thrived in, which helps the archaeologists and

historians in understanding our past.

The contribution of handicraft to the economy of the Philippines is that, it promotes our

cultural heritage through the use of indigenous materials. Handicraft products show an

individual's creativity and lofty imagination. Producers of raw materials will be encouraged to

produce more. Employment is generated especially for the undergraduates.

55
 REFERENCES

https://www.jstor.org/stable/20177403

https://en.wikipedia.org/wiki/Philippine_ceramics

https://www.sciencedirect.com/topics/earth-and-planetary-sciences/ceramics-industry

https://oaji.net/articles/2019/452-1559580876.pdf

56
 ANNEXES

COMPUTATIONS OF DEMAND AND SUPPLY GAP

ANNEX 1

DEMAND

Computation for Projected Demand

Demand = No. of Population x 30% (estimated percentage of the consumer demand)

Demand in Pieces = No. of Population x 3 (estimated pieces per household)

2023 Demand = 564,363 x 30%

Demand = 169,309

Demand in Pieces = 169,309 x 3

Demand in Pieces = 517,938

2024 Demand = 589,487 x 30%

Demand = 176,789

Demand in Pieces = 176,789 x 3

Demand in Pieces = 530, 3682025 Demand = 603,442 x 30 %

Demand = 181,033

Demand in Pieces = 181,033 x 3

Demand in Pieces = 543,098

57
2026 Demand = 617,924 x 30%

Demand = 185,377

Demand in Pieces = 185,377 x 3

Demand in Pieces = 556,132

2027 Demand = 632,754 x 30%

Demand = 189,826 x 30%

Demand in Pieces = 189,8256 x 3

Demand in Pieces = 569,479

SUPPLY

Computation for Projected Supply

Supply = Demand x 50% (Estimated Supply)

Supply in Pieces = Supply x 2 (estimated pieces)

2023 Supply = 169,309 x 50%

Supply = 84,655

Supply in Pieces = 84,655 x 2

Supply in Pieces = 169,309

2024 Supply =172,682 x 50%

Supply = 85,841

Supply in Pieces = 85,841 x 2

Supply in Pieces = 172,682

58
2025 Supply = 175,254 x 50%

Supply = 87,627

Supply in Pieces = 87,627 x 2

Supply in Pieces = 175,254

2026 Supply = 178,227 x 50%

Supply = 89,114

Supply in Pieces = 89,114 x 2

Supply in Pieces = 178,227

2027 Supply = 181,200 x 50%

Supply = 90,600

Supply in Pieces = 90,600 x 2

Supply in Pieces = 181,200

59
 ANNEX 2

DEMAND AND SUPPLY GAP

Computation for Demand and Supply Gap

D/S Gap = Demand in Pieces – Supply in Pieces

2023 D/S Gap = 530,368 – 176,789

D/S Gap = 353,579

2024 D/S Gap = 543,098 – 181,033

D/S Gap = 353,579

2025 D/S Gap = 556,132 – 185,377

D/S Gap = 370,754

2026 D/S Gap = 569,479 – 189,826

D/S Gap = 379,652

2027 D/S Gap = 647,940 – 583,146

D/S Gap = 388,764

60
 ANNEX 3

PROJECT MARKET SHARE

Computation for Projected Demand

Market Share = (Production / Projected Supply + Production) x 100

A. Melting Pot for Gold

2023 Market Share = (12,000 / 188,789) x100

Market Share = 6%

2024 Market Share = (14,400 / 195,433) x 100

Market Share = 7%

2025 Market Share = (16,800 / 202,177) x 100

Market Share = 8%

2026 Market Share = (19,200 / 209,026) x 100

Market Share = 9%

2027 Market Share = (21,600 / 215,982) x 100

Market Share = 10%

B. Cooking Pot

2023 Market Share = (3,840 / 180,629) x 100

Market Share = 2%

2024 Market Share = (4,800 / 185,833) x 100

Market Share = 3%

61
2025 Market Share = (5,760 /191,137) x 100

Market Share = 3%

2026 Market Share = (4,560 / 196,546) x 100

Market Share = 3%

2027 Market Share = (7,680 / 202,062) x 100

Market Share = 4%

C. Flower Pot/Vase

2023 Market Share = (2,400 / 179,189) x 100

Market Share = 1%

2024 Market Share = (3,120 / 184,153) x 100

Market Share = 2%

2025 Market Share = (3,840 / 189,217) x 100

Market Share = 2%

2026 Market Share = (4,560 / 194,386) x 100

Market Share = 2%

2027 Market Share = (5,280 / 199,662) x 100

Market Share = 3%

D. Overall Production

2023 Market Share = (18,240 / 195,029) x 100

Market Share = 9%

62
2024 Market Share = (22,320 / 203,363) x 100

Market Share = 11%

2025 Market Share = (26,400 / 211,777) x 100

Market Share = 12%

2026 Market Share = (30,480 / 220,306) x 100

Market Share = 14%

2027 Market Share = (34,560 / 228,942) x 100

Market Share = 15%

63
 ANNEX 4

COST ANALYSIS

Computation for Cost Price

Cost Price = Total Operating Cost / Total Production Annually

Mark-up = Unit Selling -Cost Price

A. Melting Pot

Cost Price = 184,680 / 12,000

= 15.39

Mark-up = 20 – 15.39

= 4.61

B. Cooking Pot

Cost Price = 185,880 / 3,840

= 48.41

Mark-up = 100 – 48.41

= 51.59

C. Flower Pot/Vase

Cost Price = 190,680 / 2,400

= 79.45

Mark-up = 250 – 79.45

= 170.55

64
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PERSONAL INFORMATION

Name Cherry Vill E. Gabeligno

Age 21 years old

Date of Birth June 26, 2001

Place of Birth Brgy. Bugas-Biugas, Placer, Surigao del Norte

Civil Status Singe

Sex Female

Address Brgy. Bugas-bugas, Placer, Surigao del Norte

Contact No. +639700694124

Father Edmond O. Gabeligno

Mother Jenith E. Gabeligno

PERSONAL INFORMATION

Name Jaeann A. Ayag

Age 22 years old

Date of Birth June 05, 2000

Place of Birth Brgy. Poniente, Gigaquit, Surigao del Norte

Civil Status Singe

Sex Female

Address Brgy. Poniente, Gigaquit, Surigao del Norte

Contact No. +639108561621

Father Agripino T. Ayag

Mother Evelyn A. Ayag

PERSONAL INFORMATION

Name Zucchini Arana S.

Age 22 years old

Date of Birth Santa Cruz, Tubajon. Dinagat Islands

Place of Birth January 20, 200

Civil Status Single

Sex Female

Address Tubajon, Dinagat Islands

Contact No. +639495612854

Father Fernando A. Arana

Mother Emelinda S. Arana