Sales goals, profit (loss) forecasts, and budgets

Sales Goals and Budget:

In Sweden, the tax rates for most industrial products imported are subject to customs duty which varies from 0% to 48% but the average duty rate is 20%). The rates vary according to the commodity in question and also its weight.  The cost of these pampers is 18 dollars a pack in the US. When compared to other diapers they are made of renewable resources but those renewable resources will not biodegrade as our diapers. In comparison, when selling in the competitive market the A-Maize-ing Diaper will be more cost effective and priced lower than the normal Pampers or Kimberly Clark diaper due to the cost-effectiveness of our inputs. This is a very affordable rate which is expected to go a long way in providing both affordable and dependable rates. In Sweden for example the cost will be a bit higher than in the US due to the custom duty and also sales rates incurred. Corn is the main input in the corn diapers. Iowa produces corn in large scale. Farmers grow 2.7 billion loads of corn on 13.5 million acres of land making the raw material easily acceptable. It costs 56 pounds per bushel, making it 150 billion pounds of field corn. The cost of inputs is in an average year, Iowa produces more corn than most countries.  The average price of corn for the state of Iowa is $3.29/bushel. Since 2012, there has been a reduction in the US price of corn from $6.89/bushel to $3.29/bushel because of this reduction in price, cost of production has decreased as well. In additional to the ample supply, the use of genetically modified corn allows for a greater increase in supply which in turn reduces the price, further contributing to our low marginal cost. These reasons as well as the current exchange rate between the Swedish Krona and the U.S dollar makes it far more profitable to manufacture in the U.S. Currently the exchange rate sits at 1 krona to 0.12 U. S dollars (XE Incorporated, 2018). Additionally, the labor cost in Sweden averaged 129.10 index units where the United States has an average labor cost of 108.93 index points for 2018 making labor significantly cheaper in the United States.

Timeline of profit sales

Revenues                          12,648.5

Cost of inputs                   

Corn                                        39.368 bushels/per ton

Wood pulp                          875/per ton

Other ingredients              500/per ton

Boxes for packaging       1,600

Labor                                     3000/annual  

Utilities                                

Electricity                                              4,416/annual

Water                                                       $360/annual

Corn is 129.52

Total cost = 10,880.52

Income = 1,767.98

2018 Income = 13,183.1 – 10,880.52 = 2302.58

2019 Income= 13,289.5-10880.52=2,498.98

2020 Income= 13,394.2-10880.52= 2513.68

Weight of a diaper is 0.5 oz. x 32,000 oz= 16,000 diapers per ton

Iowa minimum wage 9.75  

16,000/ 20 diapers in a box   =800 boxes cost box is 2$

3.29/per bushel

The average of electrify in Iowa is 368$ monthly

Summarize Section- CONCLUSION.