Chapter III

TECHNICAL ASPECTS

Objectives of the Study

 to emphasize the respective production flow chart of the

business

 to illustrate the location and layout of the business

 to establish and categorize the raw materials, tools and

equipment; furniture and fixtures and building that needed in

the business

 to project the production capacity of body spray in the next five

(5) years

 to organize and account the expenses of the business

 to control the proper waste disposal to be used in the business

Product

We make sure that our product is in good quality and have a

pleasant scent in order to attract and build a customer’s relation. The

good innovation of the product particularly in the scent with a

reasonable price will be our best endorsement. This product is a mixture

of ethyl alcohol, fixative, distilled water, aroma compound and fragrances

which used to give the human body a pleasant scent. Our products are

customized body spray with different variant of scent depending on the

desire of the customer.

 17

Manufacturing Process

The proper production process of the product will fall first, from

the supplier we make sure that the raw materials of body spray will

properly prepared. In production process, we make sure that all of the

ingredients such as fragrance oil, ethyl alcohol, water and fixative are in

its precise ratio and mixed it using different laboratory and measuring

materials. And after mixing, fill it in a 100mL and store into a cold dry

area. The process of making the body spray will last for a day depending

on the capacity of the workers. There will be a worker assign in every

area of his responsibility. After the process of making it, packaging will

now followed. The final stage is the distribution of the product.

 18

Production Flow Chart

Supplier of the Raw

Materials

Pearl Scent
Factory

Production
Process

Finished
Product

YES NO

Decision
Making

Buy the Other Brand of

Product Body Spray
 19

Business Location

Releasing

Releasing
 20

Business Lay-out
 21

Project Schedule of Activities

2014 2015
Septembe Novembe Decembe
October January
Activities r r r
Weeks Weeks Weeks Weeks Weeks
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Planning
Registratio
n of
Permits
and
Clearances
Building
Constructio
n
Acquiring
Furniture
and Fixture
Hiring
Employees
Acquiring
Raw
Materials
and
Equipment
including
Vehicle
Advertising
and
Product
Testing
Inauguratio
n and
Opening of
the
Business
 22

Land

The table 16 shows the purchased of land area of 120 square

meters in the amount of one thousand two hundred pesos (P 1,300.00)

per square meter.

Table 16

Land

Cost per Square

Description Area Total cost
Meter
120 square
Land P 1,300.00 P 156,000.00
meters

Building

The table 17 shows the cost of the building construction.

Table 17

Building

Description Unit cost Quantity Total cost

Building P 300,000.00 1 P 300,000.00

Depreciation of Building

The proposed building is assumed to last by ten (10) years as

evaluated by the constructor. This is shown in table 18.

Table 18

Depreciation of Building
 23

Description Unit Cost Life in Years Total cost

Building P 300,000.00 10 P 30,000.00

Delivery Equipment

The table 19 shows the purchased of delivery equipment needed by

the business. The vehicle purchased by the proponents locally.

Table 19

Delivery Equipment

Description Unit cost Quantity Total cost

Vehicle (Multicab) P 180,000.00 1 P 180,000.00

Depreciation of Delivery Equipment

The table 20 shows depreciation accumulated by the delivery

equipment and it assumed to last by ten (10) years based on the survey.

Table 20

Depreciation of Delivery Equipment

Description Unit Cost Life in Years Total cost

Vehicle (Multicab) P 180,000.00 10 P 18,000.00

Source of Machinery and Equipment

The machinery and equipment will be bought by the partners

locally with guaranteed its long service to the business.

Machinery and Equipment

 24

The table 21 shows all the necessary machinery and equipment

needed in the business.

Table 21

Machinery and Equipment

Description Unit cost Quantity Total cost

Labeling machine P 36,000.00 2pcs. P 72,000.00
Computer set 18,000.00 2pcs. 36,000.00
Printer 8,000.00 1pc. 8,000.00
Air conditioner 25,000.00 2pcs. 50,000.00
Ceiling fan 2,500.00 2pcs. 5,000.00
Fire extinguisher 3,200.00 2pcs. 6,400.00
Total P 177,400.00

Depreciation of Machinery and Equipment

The table 22 shows the depreciation accumulated by the

machinery and equipment of the business.

Table 22

Deprecation of Machinery and Equipment

Annual
Description Total cost Life in years
Depreciation
Labeling machine P 72,000.00 5 P 14,400.00
Computer set 36,000.00 5 7,200.00
Printer 8,000.00 5 1,600.00
Air conditioner 50,000.00 5 10,000.00
Ceiling fan 5,000.00 2 2,500.00
Fire extinguisher 6,400.00 1 6,400.00
Total P 42,100.00

Source of Furniture and Fixtures

The source of furniture and equipment are all available locally.

 25

Furniture and Fixtures

The furniture and fixtures used in the business are all brand new

and it is estimated to last for about 3 to 6 years.

Table 23

Furniture and Fixtures

Description Unit cost Quantity Total cost

Filling cabinet P 4,000.00 3 P 12,000.00

Long table 2,500.00 2 5,000.00
Mono block chair 375.00 5 1,875.00
Office table 2,200.00 3 6,600.00
Office chair 800.00 3 2,400.00
Total P 27,875.00

Depreciation of Furniture and Fixtures

The table 24 shows the depreciation accumulated by the furniture

and fixtures in the business.

Table 24

Depreciation of Furniture and Fixtures

 26

Annual
Description Total Cost Life in Years
Depreciation
Filling cabinet P 12,000.00 5 P 2,400.00
Long table 5,000.00 5 1,000.00
Mono block chair 1,875.00 3 625.00
Office table 6,600.00 6 1,100.00
Office chair 2,400.00 4 600.00
Total P 5,725.00

Source of Tools and Materials

The tool and materials purchased by the proponents locally.

Glass and Silverware

The table 25 shows the list of materials needed in the business.

These are all brand new and glass except for measuring spoon and cup

for efficient and effective production.

Table 25

Glass and Silverware

Description Unit cost Quantity Total cost

Beaker 100mL P 150.00 8pcs. P 1,200.00
500mL 350.00 8pcs. 2,800.00
1L 450.00 8pcs. 3,600.00
Graduated cylinder 300.00 8pcs. 2,400.00
Funnel 100.00 8pcs. 800.00
Volumetric flask 225.00 8pcs. 1,800.00
Stirring rod 90.00 8pcs. 720.00
Measuring spoon & 350.00 3 sets 1,050.00
cup
Total P 14,370.00
 27

Glass and Silverware Expense

The table 26 shows the expense of glassware and silverware due to

breakage and loss.

Table 26

Glass and Silverware Expense

Total
Description Unit Cost Breakage/Loss
Expense
Beaker 100mL P 150.00 1 P 150.00

500mL 350.00 1 350.00

1L 450.00 1 450.00

Graduated cylinder 300.00 1 300.00

Funnel 100.00 1 100.00

Volumetric flask 225.00 1 225.00

Stirring rod 90.00 1 90.00

Measuring spoon & 350.00 350.00

1
cup
Total P 2,015.00
Assumed: There will be 1 unit of material assumed for breakage and loss

Source of Raw Materials

The raw materials brought by the proponents are mostly outside

the local area particularly the fixative, ethyl alcohol and fragrance

because it can be purchased at Bambang, Manila and Kawit, Cavite.

Raw Materials

The tables 27 show the cost of raw materials of 100mL per ten (10)

bottles of body spray.

 28

Table 27

Cost of 100mL Body Spray

Description Unit Cost Quantity Needed Total Cost

Ethyl Alcohol P 90.00 600mL P 90.00
Fixative 40.00 50mL 40.00
Distilled Water 5.00 250mL 5.00
Fragrance 380.00 100mL 380.00
Total P 515.00

Projected Annual Raw Materials

The table 28 shows the projected annual raw materials of 100mL

of body spray in male and female for the next five (5) years.

Table 28

Projected Annual Raw Materials – 100 mL

Production Cost per

Year Total Cost
Capacity Body Spray
2015 43,680 P 51.50 P 2,249,520.00
2016 49,140 53.05 2,606,877.00
2017 54,600 54.64 2,983,344.00
2018 60,060 56.28 3,380,176.80
2019 65,520 57.97 3,798,194.40
Assumption: There is an increase of 3% in price of raw materials of the
body spray in every year.

Direct Materials

The table 29 shows the direct materials needed in the operation.

Table 29

Direct Materials
 29

Description Unit Cost Quantity Total cost

Bottle 100mL P 12.00 43,680 pcs. P 524,160.00

Cartoon 6.00 1,820 pcs. 10,920.00

Total     P 535,080.00

Projected Direct Materials

The table 30 shows the projected direct materials for the next five

(5) years.

Table 30

Projected Direct Materials

Year Total Cost

2015 P 535,080.00

2016 620,027.04

2017 709,582.97

2018 803,960.78

2019 903,355.88
Assumption: There is an increase of 3% in price of direct materials every
year. The projected production capacity is multiplied by the increase of
indirect materials.

Indirect Materials

The table 31 shows the indirect materials needed in the operation.

Table 31

Indirect Materials
 30

Description Unit Cost Quantity Total cost

Hairnet P 15.00 72 pcs. P 1,080.00

Laboratory coat 300.00 16 pcs. 4,800.00

Total P 5,880.00

Projected Indirect Materials

The table 32 shows the projected indirect materials for the next

five (5) years.

Table 32

Projected Indirect Materials

Year Total Cost

2015 P 5,880.00
2016 6,056.40
2017 6,238.09
2018 6,426.07
2019 6,618.85
Assumption: There is an increase of 3% in price of indirect materials
every year.

Representation Expense

The table 33 shows the representation expense in the business.

Table 33

Representation Expense

Description Cost
Planning P 2,000.00
Blessing and Opening 25,000.00
Total P 27,000.00

Repairs and Maintenance

The table 34 shows the repairs and maintenance of the business.

 31

Table 34
Repairs and Maintenance
Description Monthly Expenses Annual Expenses
Vehicle P 1,000.00 P 12,000.00

Projected Repairs and Maintenance

The table 35 shows the projected repairs and maintenance based

on annual cost.
Table 35
Projected Repairs and Maintenance
Year Total Cost
2015 P 12,000.00
2016 12,240.00
2017 12,484.80
2018 12,734.50
2019 12,989.19
Assumption: There is an increase of 2% every year.

Advertising Expense

Upon starting the building construction, the advertisement also

starts. Table 36 shows the advertising expense of the business.

Table 36

Advertising Expense

Description Cost
Flyers P 500.00
Posters 500.00
1,000.0
Tarpaulins
0
 32

Radio 3,500.00
Total P 5,500.00

Projected Advertising Expense

Table 37 shows the projected advertising expense for the next five

(5) years.

Table 37

Projected Advertising Expense

Year Total Cost

2015 P 5,500.00

2016 5,665.00

2017 5,834.95

2018 6,010.00

2019 6,190.30
Assumption: There is an increase of 3% every year.

Permit and Licenses

Table 38 shows the expense of permit and licenses in a year.

Table 38

Permit and Licenses

Description Total Cost

Business Permit & Licenses P 10,000.00

Building Permit 10,000.00

Total P 20,000.00
 33

Projected Permit & Licenses

Table 39 shows the projected permit and licenses of the business

for the next five (5) years.

Table 39

Projected Permit & Licenses

Year Total Cost

2015 P 20,000.00

2016 20,000.00

2017 20,400.00

2018 20,400.00

2019 20,808.00
Assumption: There is an increase of 2% in every two (2) years.

Office Supplies

Table 40 shows the office supplies used in a year.

Table 40

Office Supplies

Description Unit cost Quantity Total cost

Columnar P 28.00 4pcs P 112.00
Record book 43.00 4pcs 172.00
Ball pen 5.00 20pcs 100.00
Clip/fastener 2.00 100pcs 200.00
Staple wire 15.00 10boxes 150.00
Bond paper(short) 160.00 2ream 320.00
Folder(short) 8.00 24pcs 192.00
Pencil 5.00 20pcs 100.00
 34

Receipt 1,500.00 1bondle 1,500.00

Deliver Receipt 1,500.00 1bondle 1,500.00
Total     P 4,346.00

Projected Office Supplies

Table 41 shows the projected office supplies and its increase for

the next five (5) years.

Table 41

Projected Office Supplies

Description 2015 2016 2017 2018 2019

Columnar 112.00 114.24 116.52 118.86 121.23
Record book 172.00 175.44 178.95 182.53 186.18
Ball pen 100.00 102.00 104.04 106.12 108.24
Clip/fastener 200.00 204.00 208.08 212.24 216.49
Staple wire 150.00 153.00 156.06 159.18 162.36
Bond
320.00 326.40 332.93 339.59 346.38
paper(short)
Folder(short) 192.00 195.84 199.76 203.75 207.83
Pencil 100.00 102.00 104.04 106.12 108.24
Receipt 1,500.00 - - 1,591.81 -
Deliver Receipt 1,500.00 - - 1,591.81 -
Total 4,346.00 1,372.92 1,400.38 4,612.01 1,456.95
Assumption: There is an increase of 2% in every year.

Salaries and Wages

Table 42 shows the monthly and annual salaries and wages of the

business.

Table 42
Salaries and Wages
No. of
Position Monthly Salary Annual Salary
Employees
Manager 1 P 8,500.00 P 102,000.00
Cashier 1 6,500.00 78,000.00
 35

Production
1 7,000.00 84,000.00
Supervisor
Worker 3 15,000.00 180,000.00
Chemist 1 8,000.00 96,000.00
Delivery Man 1 5,250.00 63,000.00
Bookkeeper 1 1,500.00 18,000.00
P
Total  
621,000.00

Projected Salaries and Wages

Table 43 shows the projected of salaries and wages and its

increase for the next five years.

Table 43

Projected Salaries & Wages

Position 2015 2016 2017 2018 2019

P P P P
Manager P 102,000
102,000 107,100 107,100 112,455
Cashier 78,000 78,000 81,900 81,900 85,995
Production
84,000 84,000 88,200 88,200 92,610
Supervisor
Worker 180,000 180,000 189,000 189,000 198,450
Chemist 96,000 96,000 100,800 100,800 105,840
Delivery
63,000 63,000 66,150 66,150 69,458
Man
Bookkeeper 18,000 18,000 18,900 18,900 19,845
P P P P P
Total
621,000 621,000 652,050 652,050 684,653
Assumption: There is an increase of 5% in every two (2) years.

SSS Contribution
The table 44 shows the employee and employer share of SSS
contribution.
Table 44
SSS Contribution
Position Monthly ER EC Monthly Annual
Salary Contributio Contributio
 36

n n
P P P P
P 945.00
Manager 8,500.00 935.00 10.00 11,340.00
Cashier 6,500.00 715.00 10.00 725.00 8,700.00
Production
7,000.00 770.00 10.00 780.00 9,360.00
Supervisor
1,650.0
Worker(3) 15,000.00 30.00 1,680.00 20,160.00
0
Chemist 8,000.00 880.00 10.00 890.00 10,680.00
Delivery
5,250.00 605.00 10.00 615.00 7,380.00
Man
P
 
Total 67,620.00

Projected SSS Contribution

The table 45 shows the projected SSS contribution for the next five
(5) years.
Table 45
Projected SSS Contribution

Position 2015 2016 2017 2018 2019

P11,340.0 P11,340.0 P12,000.0 P12,000.0 P12,660.0
Manager 0 0 0 0 0
Cashier 8,700.00 8,700.00 9,360.00 9,360.00 9,360.00
Production
9,360.00 9,360.00 10,020.00 10,020.00 10,680.00
Supervisor
Worker(3) 20,160.00 20,160.00 22,140.00 22,140.00 22,140.00
Chemist 10,680.00 10,680.00 11,340.00 11,340.00 12,000.00
Delivery
7,380.00 7,380.00 7,380.00 7,380.00 8,040.00
Man
P67,620. P67,620. P72,240. P72,240. P74,880.
Total 00 00 00 00 00
Assumption: SSS contribution is assumed to increase based on the
increase of employees salary.

PhilHealth Contribution
 37

The table 46 shows the employee and employer share of PhilHealth

contribution.
Table 46
PhilHealth Contribution
Monthly Monthly Employer Annual
Position
Salary Contribution Share Contribution
P P
Manager 8,500.00 P 200.00 P 100.00 1,200.00
Cashier 6,500.00 200.00 100.00 1,200.00
1,050.0
Production
Supervisor 7,000.00 200.00 87.50 0
Worker(3) 15,000.00 600.00 100.00 3,600.00
Chemist 8,000.00 200.00 100.00 1,200.00
Delivery
Man 5,250.00 200.00 100.00 1,200.00
Total P 9,450.00

Projected PhilHealth Contribution

The table 47 shows the projected PhilHealth contribution for the
next five (5) years.
Table 47
Projected PhilHealth Contribution

Position 2015 2016 2017 2018 2019

P P P P P
Manager 2,400.00 2,400.00 2,400.00 2,400.00 2,700.00
Cashier 2,400.00 2,400.00 2,400.00 2,400.00 2,400.00
Production
2,400.00 2,400.00 2,400.00 2,400.00 2,400.00
Supervisor
Worker(3) 7,200.00 7,200.00 7,200.00 7,200.00 7,200.00
Chemist 2,400.00 2,400.00 2,400.00 2,400.00 2,400.00
Delivery
2,400.00 2,400.00 2,400.00 2,400.00 2,400.00
Man
P19,200. P19,200. P19,200. P19,200. P19,500.
Total
00 00 00 00 00
Assumption: PhilHealth contribution is assumed to increase based on
the increase of employees salary.
 38

Pag-Ibig Contribution
The table 48 shows the Pag-Ibig contribution of the business.

Table 48

Pag-Ibig Contribution
Monthly Monthly Monthly Annual
Position
Salary Rate Contribution Contribution
Manager P 8,500.00 2% P 100.00 P 1,200.00
Cashier 6,500.00 2% 100.00 1,200.00
Production
7,000.00 2% 100.00 1,200.00
Supervisor
Workers 15,000.00 2% 300.00 3,600.00
Chemist 8,000.00 2% 100.00 1,200.00
Delivery Man 5,250.00 2% 100.00 1,200.00
Total   P 9,600.00

Projected Pag-Ibig Contribution

The table 49 shows the projected Pag-Ibig contribution for the next
five (5) years.
Table 49
Projected Pag-Ibig Contribution

Position 2015 2016 2017 2018 2019

P P P P P
Manager 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Cashier 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Production
1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Supervisor
Worker(3) 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00
Chemist 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Delivery
1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Man
P9,600.0 P9,600.0 P9,600.0 P9,600.0 P9,600.0
Total
0 0 0 0 0
Assumption: Pag-Ibig contribution is assumed to increase based on the
increase of employees salary.

Utilities Expense
 39

The table 50 shows the utilities expense during the operation of

the business.
Table 50
Utilities Expense
Rate per
Description Source Annual Rate
Month
Tagum Water
Water P 1,000.00 P 12,000.00
District
Electricity DANECO 2,000.00 24,000.00
Fuel Petron 2,600.00 31,200.00
Telephone PLDT 1,100.00 13,200.00
Total P 80,400.00

Projected Utilities Expense

The table 51 shows the projected utilities expense for the next five

(5) years.

Table 51
Projected Utilities Expense

Descripti
2015 2016 2017 2018 2019
on
P P P P P
Water
12,000.00 12,000.00 12,600.00 12,600.00 13,230.00
Electricity 24,000.00 24,000.00 25,200.00 25,200.00 26,460.00

Fuel 31,200.00 31,200.00 32,760.00 32,760.00 34,398.00

Telephone 13,200.00 13,200.00 13,860.00 13,860.00 14,553.00

P80,400. P80,400. P84,420. P84,420. P88,641.
Total
00 00 00 00 00
Assumption: There is an increase of 5% in every two (2) years.

Waste Disposal Method

 40

R.A. 9003 has many provisions that promotes proper waste

disposal. The business ensures the proper segregation, collection,

transport, storage, treatment and disposal of solid waste. Our proper

waste disposal area is at the back of our establishment. The staffs and

employees are strictly following the proper segregation of biodegradable

and non-biodegradable and recyclable materials with an indicated label.

The non-biodegradable will collect by the garbage truck every Friday at

9:00 o’clock in the morning. Some waste of raw materials that are

recyclable will be donated at the local government projects.