1

Chapter 1

INTRODUCTION

Objective of the study

This purpose of this study is to find out how feasible the Street Food business

in front of University of Mindanao at Mabini Street, Tagum City. By the use of

gathered data, the proponents assured that the proposed business aims to

determine the competitiveness of the business in the market and to offer affordable

price and delicious food that is attractive to the customer. The proponents also want

to determine the capital needed to start the business and to determine the financial

profitability and feasibility of the business. Moreover, the main objective of the study

is to maximize the wealth of the owner and to contribute to the community by selling

affordable products that is economical to an individual. Furthermore, the proponents

put up a proposed business of this kind for someone who is on a budget.

Methodology

The proponents gathered the necessary data needed for the feasibility study

through survey, observation, and interview to some people who are in the same field

of the proposed business. The gathered information serves as a guide for the

proposed business, which is the “Turon”. The information serves as an outlook to the

proponents on handling and managing a business. The information are then be

collected and measured for testing how profitable and feasible this kind of business.

In addition, the proponents will be using questionnaires that will be the basis for the

information needed in operating the business.

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Scope and Limitations of the Study

The proponents focused on the four main specific areas which are the

Marketing Aspect, Production and Technical Aspect, Organization and Management

Aspect, and lastly, the Financial Aspect. The data were collected from the persons

who are involved and knowledgeable about the business. Assumptions of some

important details are not a hundred percent (100%) accurate. Limitation with regards

to the information gathered is kept undisclosed due to confidentiality purposes.

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Chapter 2

Marketing Plan

Description of the Project

The business the proponents have taken into consideration is a local food

production. Our business is named “Turon King” that provides affordable price and

flavourful “Turon” that could help in the savings for those who were tight in budget

customers where they would also enjoy the product. The proposed business will be

located in front of University of Mindanao at Mabini Street, Tagum City.

The proponents decided to choose a business that focuses on other resource

distribution for improving nutrition security of the students and approaches to

enhancing the health and nurturing development functions within the school. The

proponents business facilitates and encourages an exchange of ideas and

experience in the area of food and nutrition security and promotes a productive

environment within the community.

Project’s Contribution to the Economy

Employment/Income Generation

This street food is generally a small-scale business having basic facility and

small amount of capital, yet it has a considerable potential to generate income. It can

create employment that requires relatively simple skills that could be an opportunity

to those less skilled workers or those who were unable to finish their studies.
 4

Government and Local Community

This could help the government through taxes and business licences paid

where it can be used for improvement of the locality that could bring a better life for

the people. The proposed business contributes the local economy bringing growth

and innovation to the community in which the business is established. They

essentially give money back to their local community.

Investors and Lending Institutions

The proposed business “Turon King” could generate investment to some

investors who would take a risk and like to support in the achievements of their goals

and objectives. This proposed business could also generate investment to some

financial companies and banking companies who can lend their money for the

business.
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Chapter 3

MARKETING PLAN

Description of the Products/Services

Turon King offer street food Turon that can be enjoyed by people who loves to

eat bananas’ and purchased at reasonable price. The proposed business will start to

operate from 8:00am to 5:00pm and aim to meet customer satisfaction. The

aforementioned business is focused on producing nutritious and affordable Turon,

making every bit of the product appealing yet tasty and healthy to the consumers,

which are mainly the students of University of Mindanao at Mabini St. Tagum City

and possible passer-by’s who wants to eat delicious Turon.

Comparison of the Product with its Competitors

Turon King will give customers a completely new atmosphere that will be

attractive to them and additional offer of freebees will be available for those people

who are regular customers of the food business. The product to be offered by the

Turon King is new to the preference of the customer and the price is affordable and it

will make the customer really enjoy. The proposed business also considers the

cleanliness of the product and the assurance that it will make the customer want

more.
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Market Area

The projected business, Turon King, will be operating at its prospective

location in front of University of Mindanao at Mabini St., Tagum City province of

Davao del Norte.

Main Customers

The target market focuses on the students of University of Mindanao, male

and female, regardless of the year level as long as they can afford to buy the product

for their consumption and satisfaction and also possible passer-by’s who wants to

eat our product.

Location

Turon King will be located in front of University of Mindanao at Mabini Street

Tagum City. This location is perceived as advantageous to the business because of

the number of students which mainly our target buyers and anticipating some

passer-by who would purchase our product. The location site of the proposed

business is presented in Figure 1.

 7

Philippine Map

Mindanao Map

Tagum City Map

Davao del Norte Map

 8

X
MABINI ST. TAGUM CITY

SS

Figure 1. Vicinity Map

 9

Proposed Design of the Rolling Store

The researchers decided to create a proposed design of rolling store and

make it more something creative in order to attract customers’ attention. Figure 2

shows the proposed design of Rolling Store in business.

Figure 2. Rolling Store

 10

Total Demand

Historical Demand

The historical demand is computed based on the total number of students in

University of Mindanao Tagum College from school year 2016-2017 to 2018-2019.

The survey was conducted to only 665 students where 599 students responded

positively which is equivalent to 90% which means that it is the proportion of the

whole student population who are willing to purchase the proposed products. The

data as what the proponents have gathered gives the details of the prospective

customers who can consume at least 4 pieces a week 4 pieces will be multiplied by

4 to get the demand per month which is 16 which is then multiplied by 10 which

results to 160 pieces per year. Table 1 will show the historical demand of the

population acquired from University of Mindanao Tagum College.

Table 1

Historical Demand

Total No. of
Population Average Average
sticks
Year SHS and percentage of consumption
consumed per
College client (90%) per month
year

2016 18,537 16,683 16 2,669,280

2017 16,505 14,855 16 2,376,800

2018 17,576 15,818 16 2,530,880

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Projected Demand

Table 2 presents the projected demand for the next three (3) consecutive

years. The average increase is computed using the moving average method

reflected in Annex.

Table 2

Projected Demand

Average Number Average No. of

Year Based Year
Increase % Turon per Year

2019 2,530,880 8.73% 2,751,826

2020 2,751,826 8.73% 2,992,060

2021 2,992060 8.73% 3,253,267

Total Supply

Historical Supply

At the prospective location of the proponents for the proposed business, there

were others of the same operation which will be considered as its competitors. They

were asked for some information which are the bases of the proponents in

estimating their projected supply. The details will be presented in Table 3.

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Table 3

Historical Supply

Competitor 2016 2017 2018

Cart 1 190,000 195,000 200,000

Cart 2 200,000 200,000 200,000

Total 390,000 395,000 400,000

Projected Supply

Table 4 shows projected supply for the next three (3) consecutive years.

Table 4

Projected Supply

Average Projected
Year Based Year
Increase Supply

2019 400,000 1.28% 405,120

2020 405,120 1.28% 410,306

2021 410,306 1.28% 415,557

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Demand and Supply Analysis

Table 5 shows the demand and supply analysis for the three (3) consecutive

years using the historical and projected pieces of demand and supply.

Table 5

Demand and Supply Analysis

Unsatisfied
Year Demand Supply
Demand

Historical

2016 2,520,960 390,000 2,130,960

2017 2,244,640 395,000 1,849,640

2018 2,390,400 400,000 1,990,400

Projected

2019 2,599,082 405,120 2,193,962

2020 2,825,982 410,306 2,415,676

2021 3,072,690 415,557 2,657,132

Market Share

The market share is computed based on the total production capacity of the

proposed business. The proponents assumed that they are capacitated in producing

15.95% of the total unsatisfied demand.

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Table 6

Projected Market Share

Production
Unsatisfied Market
Year Capacity
Demand Share
per Year

2019 2,193,962 350,000 15.95%

2020 2,415,676 385,300 15.95%

2021 2,657,132 423,813 15.95%

Table 7

Historical Selling Price

Year Selling Price

2016 3

2017 4

2018 5

Projected Selling Price

The proponents will increase the price of P1.00 for the year 2020 due to the

assumption that the cost of raw materials, direct labor and corresponding overhead

will have its possible great increase in every year. Table 8 shows the projected

selling price for the first three (3) years.

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Table 8

Projected Selling Price

Year Selling Price

2019 5

2020 6

2021 7

Sales Revenue

Table 9 shows the revenue of the business. The data stated are based on the

computation from the total number of pieces produced per year. Supply capacity is

multiplied by selling price to get the total sales.

Table 9

Sales Revenue

Production Selling Total

Year
Capacity Price Sales

2019 350,000 5 1,750,000

2020 385,300 6 2,311,800

2021 423,813 7 2,966,691

Marketing Strategy

Our products grilled banana and banana cue, aim to meet the customers’

satisfaction in a safety and hygienic way.

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Promotional Measures and Marketing

The location of our business already provides us the advantage in promoting

our products since it is in the place of UM Tagum College where most of the

students pass by during morning and afternoon snacks to buy food. A clean facility

and equipment will be used in attracting customers. The amount of signage is

budgeted at an amount of P350.00 per year and assumes to increase by 3% per

year.

Table 10

Promotional Expenses

2019 2020 2021

Signage 350 361 371

Total 350 361 371

Distribution Strategy

The business will be using direct selling to customers wherein customers

could easily acquire the products.

Pricing Strategy

The prices of our Turon will depend on the competitors.

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Marketing Budget

The business will utilize and spend wisely the money for budgeting. It will only

buy the materials needed to run the business and avoid purchasing of unnecessary

things.
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Chapter 4

Production Plan

Production Process

Since the proposed business is already acquainted to the community, it will be

saleable to its target market. There is a higher possibility that the business will have

a greater sales volume and an increase in producing the products. In terms of

quality, the proponents make sure to the public that the products are properly cooked

to avoid food poisoning, maintains clean, order since it is a food business, and can

satisfy starvation of the customer.

The production process of the proposed business would be first, to purchase

all the raw materials and necessary ingredients from the market. Lay slices

of banana on a wrapper. Spoon a few teaspoons of langka over the slices. Wrap the

turon by folding the top and bottom of the wrapper toward the middle.

Heat the oil and lay the turon in the oil. Halfway through the frying process, turn the

rolls with a pair of tongs. Remove the rolls when they are golden brown. Combine

the ingredients in a saucepan. To make the syrup, all you need is brown sugar and

water. Place 1 cup of sugar and 3/4 cup water in a saucepan and stir the mixture.

Cook the syrup and pour it over the turon.

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Procurement of the necessary ingredients.

Separate lumpia wrapper one by one (if you haven’t

done so) and set aside.

Peel banana and slice in half horizontally to make 8

half slices.

Make a flour paste for sealing the turon by mixing flour and
water in a small prep bowl.

Lay lumpia wrapper flat like a diamond shape with one corner
towards you. Place one slice of banana about an inch from the
bottom

Fold once in an upward direction.

Fold the sides like an envelope.

Roll one more time then wet the top end with flour paste, then
seal. Set aside and Repeat steps 4-7 until you finish wrapping all
8 pieces.

Figure 3. Production Process of Turon

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Tools and Equipment

Table 11 and Table 12 shows the tools and equipment needed in the

business operation. The very important consideration is to buy a good quality tools to

avoid delay of operations.

Table 11

Tools

Particulars Quantity Unit Cost Total Cost

Frying Pan 1 700 700

Knife 1 200 200

Kitchen Tong 1 150 150

Ladle 1 200 200

Plate 1 150 150

Prep Bowl 1 300 300

Cutting Board 1 150 150

Total 53,650
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Table 12

Equipments

Particular Quantity Unit Cost Total Cost

Rolling Store 1 50,000 50,000

Frying Pan 1 700 700

Gas Tank 1 1,800 1,800

Burner 1 2,000 2,000

Total 54,500

Furniture and Fixture

Table 13 shows the furniture and fixture that are being acquired. It will be

used in the business operation.

Table 13

Furniture and Fixture

Particular Quantity Unit Cost Total Cost

Rolling Store 1 50,000.00 50,000.00

Total 50,000.00
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Depreciation

Table 14 shows the depreciation expense of the equipment and furniture and

fixtures and a particular item in store supplies. Each item has an economic life span

and proponents used straight line method for depreciation.

Table 14

Depreciation and Amortization

Estimated
Particulars Amount 2019 2020 2021
Useful Life

Tools and

Equipment

Rolling Store 50,000 5 10,000 10,000 10,000

Frying Pan 700 2 350 350 700

Gas Tank 1,800 5 360 360 360

Burner 2,000 3 667 667 667

Total 11,377 11,377 11,377

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Sources of Equipment

The equipment to be used in the proposed business will be acquired within

Tagum City.

Planned Capacity

Regarding the plan about the location and price, the proponents selected their

location at UM Tagum College at Tagum City because it has a large number of

population of students and a small number of competitors in turon. They are

confident that their products and services will be satisfying. Their pricing policy will

be reasonable so their target customers will easily get. The proponents believe that

they have a maximum capacity of 300,000 sticks per year.

Table 15

Planned Capacity

Year Production Capacity per

Products
Year

Turon 2019 350,000

2020 385,300

2021 423,813

Total 1,159,113
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Terms and Conditions of Purchase Equipment

It has a 2 year warranty and if the said equipment has factory defect. It can be

returned to the store within 1 month where they purchase it and the store will replace

it immediately.

Cost of Direct Materials

Presented in Table 16 is the cost of purchase of grilled banana and banana

cue supplies to be sold for 1 year. This is expected to increase by 2% per year

based on the conducted interview.

Table 16

Cost of Direct Materials

Quantity Per Cost per Total Direct

Particulars Unit
Year Unit Material Cost

Banana kilo 5,000 19.00 95,000

Lumpia Wrapper kilo 4,465 70.00 312,550

Brown Sugar kilo 1,744 15.00 26,160

Canola Oil Kilo 6,975 58.00 404,550

Egg Tray 20 120 2,400

Water Gallon 85 15.00 1,275

Langka Kilo 100 40 4,000

Total 845,935
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Projected Cost of Direct Materials

Table 17 shows the annual projected cost of raw materials. It is assumed that

the cost will increase by 2% every year due to unpredictable events.

Table 17

Projected Cost of Direct Materials

Year Amount

2019 845,935

2020 862,854

2021 880,111

Raw Materials Availability

The raw materials being used in the operation is purchased every week to

ensure that the ingredients used are new and to prevent spoilage of the raw

materials.

Direct Labor

Table 18 shows the annual salaries expense for the employee. The worker

will have a P7,000.00 per month.

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Table 18

Cost of Direct Labor

No. of No. of

Position Salary/Month worker months Total

per year

Cook 7,000.00 1 10 70,000.00

Sales Personnel 7,000.00 1 10 70,000.00

Total P140,000.00

Projected Annual Direct Labor

Table 19 shows the annual direct labor for the workers. The proponents

assumed to increase their salaries to 2% per year.

Table 19

Projected Annual Direct Labor

Year Amount

2019 140,000.00

2020 142,800.00

2021 145,656.00
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Table 20

Projected Contribution Expense

2019 Contributions

SSS 14,400

Philhealth 2,940

Pag-ibig 2,400

Total 19,740

2020 Contributions

SSS 14,400

Philhealth 2,940

Pag-ibig 2,400

Total 19,740

2021 Contributions

SSS 14,400

Philhealth 2,940

Pag-ibig 2,400

Total 19,740
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Table 21

Factory Overhead

Utility Total

Gas Tank 1,800

Burner 2,000

Frying Pan 700

Knife 200

Kitchen Tong 150

Ladle 200

Plate 150

Cutting Board 150

Prep Bowl 300

Total 5,650

Projected Factory Overhead

Table 22 presents the Annual Factory Overhead for the business operation.

The proponents assume that every year the factory overhead increase to 3% due to

the unpredictable events.

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Table 22

Projected Annual Factory Overhead

Year Amount

2019 5,650

2020 5,820

2021 5,995

Table 23

Projected Total Manufacturing Cost

2019 2020 2021

Direct Material 845,935 862,854 880,111

Direct Labor 140,000 142,800 145,656

Factory 5,650 5,820 5,995

Overhead
Total Product 991,585 1,011,474 1,031,762
Cost
Products 45,000 48,000 51,000
Manufactured
Cost Per Unit 22 21 20
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Store Supplies

Table 24 shows the Store Supplies that are needed for the operation. It

identifies the unit cost annual cost of supplies for the next three (3) years. It is

assumed to increase by 2% per year.

Table 24

Store Supplies

Unit 2018
Particulars
Cost Quantity Annual Cost

Apron 50 3 150

Hand Gloves 75 2 150

Ballpen 10 10 100

Hairnet 10 5 50

Record Book 130 2 260

Plastic Bag 13 20 260

Books of Account 100 2 200

Calculator 100 1 100

Serving tray 100 2 200

Total 1,470
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Projected Store Supplies Expense

Table 25 shows the projected supplies expense. It is assumed to increase 2%

per year.

Table 25

Projected Store Supplies Expense

Year Amount

2019 1,470

2020 1,499

2021 1,529

Repair and Maintenance Expense

The proponents will spend P1,500.00 per annum for the maintenance of the

equipment needed. This is to ensure the continuous flow of the production. There is

no assumed increase considering that the proposed business will not experience a

repair of the equipment. Table 26 shows the amount per year. It is assumed to

increase 2% per year.

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Table 26

Projected Repair and Maintenance

Year Amount

2019 1,500

2020 1,530

2021 1,561

Business Permits and Licences

Table 27 shows the business permit to start the proposed business legally. It

is assumed that the business permit and tariff will increase by 2% per year. The tariff

is paid on a daily basis of P12.00.

Table 27

Business Permits and Licenses

Particulars Amount

Medical and Health Certificate 400

Inspection Fee 110

ESPF 115

RCEPF 50

Engineering Fee 600

BFP 200

Cedula 110

Barangay Clearance 100

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BIR 450

Arca Bala 4,320

TOTAL P6,455

Table 28

Projected Business Permits and Licenses

Year Amount

2019 6,455

2020 6,584

2021 6,716

Honorarium of the Bookkeeper

The owner hires a bookkeeper amounted to 1,000.00 every month or a total of

P12,000.00 per year. No assumption of increase within three (3) years. Table 29

shows the projected amount.

Table 29

Projected Honorarium of the Bookkeeper

Year Amount

2019 12,000

2020 12,000

2021 12,000
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Summary of Projected Operating Expenses

Table 30 below shows the summary of operating expense incurred in the

business for succeeding year. It is presented yearly and operating expense of the

proposed business during its operation.

Table 30

Summary of Projected Operating Expense

Particulars 2019 2020 2021

Depreciation Expense 12,527 12,722 13,257

Repair and Maintenance 1,500 1,530 1,561

Store Supplies Expense 1,470 1,499 1,529

Business Permit and

6,455 6,584 6,716
Licences

Salaries and Wages 140,000 142,800 145,656

Honorarium Expense 12,000 12,000 12,000

Promotional Expense 350 361 371

Total 174,302 177,496 181,090

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Chapter 5

ORGANIZATION AND MANAGEMENT PLAN

Form of Business Enterprise

The business shall be registered as Turon King which is located at UM Tagum

College, Tagum City. The type of business will be a sole proprietorship business and

this only lies in the hands of the owner. The decision making is easy because there

is no intervention by the other and can enjoy the profit solely but suffers the losses

incurred. The proponents believe that sole proprietorship is better for this business.

Management and Organization Structure

The owner/manager is the one who will supervise the operation of the

business. Moreover, the business also needs a cook who will be assigned in frying

the products and a sale’s personnel to take care of the customers and assist the

cook. Figure 5 shows the organizational structure of the business.

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Owner/Manager

Bookkeeper

Cook Sales Personnel

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Figure 5. The Organizational Structure

Management Qualifications and Functions

The table below shows the qualifications and responsibilities of each

personnel of the business, which shows their ability to meet the needs of the

business to operate effectively and efficiently.

Position Qualifications Responsibilities

*Male or Female

*20 to 30 years old The cook is responsible in the

Cook *Knows how to cook preparation and management of the

*Good at multitasking entire process of cooking the products.

*Male or Female

*20-30 years old

*with pleasing

personality The sales personnel is responsible in

Sales *good at handling accommodating customers, accepting

Personnel customers payment and sometimes helping the

*can work under cook in a sudden hectic times.

pressure

*trustworthy

The owner/manager is responsible for

Owner/Manager
overseeing and leading the work of a
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group of people in many instances.

Maintains subsidiary accounts by

verifying, allocating, and posting

Bookkeeper
transactions.
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Chapter 6

FINANCIAL PLAN

Financial Aspect

When organizing a business, it is necessary to determine whether the

proposed business will be feasible and profitable.

Major Assumption

1. The market share is assumed to be 15.95% of the total projected unsatisfied

demand.

2. The promotional expense is assumed to increase by 3% per year.

3. The selling price is assumed to increase by P1.00 per year.

4. Moving Average Method was used in computing projections.

5. Straight Line method was used in the computation of depreciation.

6. Direct labor will increase by 2% per year.

7. Salaries Expense will increase by 2% per year.

8. Daily purchasing of raw materials.

9. Raw materials will increase by 2% each year.

10. Factory Overhead will increase by 3% each year.

11. Business permit and Licenses will increase by 2% per year.

12. The business will operate 5 days a week and 10 months per year. Only during

school days.

13. Store supplies expense will increase by 2% per year.

14. The owner withdraws 50% of the income.

15. Total Project Cost

 40

Pre-operating expenses

Business permit P6,455

Initial Fixed Capital

Tools and Equipment 25,950

Furniture and Fixtures 50,000 75,950

Initial Working Capital (3 days)

Direct Materials 84,394

Operating Expenses (3 days)

Promotional Expense P350

Store Supplies 1,470

Salaries and Wages 14,000

Overhead Expense 5,650

Repairs and Maintenance 150 P21,620

Total Initial Working Capital 188,419

Add: Cash on Hand P1,581

Investment Cost 190,000

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Turon King
PROJECTED INCOME STATEMENT
FOR THE YEARS ENDED DECEMBER 31, 2019-2021

2019 2020 2021

Revenue

Sales 1,750,000 2,311,800 2,966,691

Less: Cost of Goods Sold

Direct Materials 845,935 862,854 880,111

Direct Labor 140,000 142,800 145,656

Factory Overhead
5,650 5,820 5,995

Total 991,585 P1,011,474 P1,031,762

Gross Profit 758,415 1,300,326 P1,934,929

Business Permit and

6,455 6,584 6,716
License

Depreciation Expense 12,527 12,722 13,257

Store Supplies Expense 1,470 1,499 1,529

Repairs and Maintenance P1,500 1,530 1,561

Promotional Expenses P350 P361 P371

Total Expenses 22,302 22,696 23,434

NET INCOME 736,112 1,277,630 1,911,495

 42

Turon King
PROJECTED CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 2019 - 2021

2019 2020 2021

Cash flow from Operating Activities

Net Income 736,112 1,277,630 1,991,495

Depreciation 12,527 12,722 13,257

Net Cash from

Operating Activities 748,639 1,290,352 2,004,752

Cash flow from Investing Activities

Acquisition of Fixed Asset P53,650 P1,345 P3,257

Store Supplies P1,470

Net Cash from Investing

Activities P55,120 1,345 3,257

Cash flow from Financing Activities

Cash Contribution by Owner 190,619 P0.00 P0.00

Cash Withdrawal of Owner 208,667 P408,570 P665,471

Net cash from Financing

Activities (18,048) (P408,570) (P665,471)

Increase (decrease) in Cash 675,471 880,435 1,336,024

Cash Balance Beg. P0 675,471 1,555,908

Cash Balance End. 675,471 1,555,908 2,891,932

 43

Turon King

PROJECTED BALANCE SHEET

AS OF DECEMBER 31, 2019 – 2021

2019 2020 2021

ASSETS

Cash 675,471 1,555,908 2,891,932

Non-Cash Asset

Tools and

Equipment 53,650 54,995 56,907

Store Supplies 1,470 1,499 1,529

Total 55,120 56,494 58,436

Less: Accumulated

Depreciation 12,527 25,054 37,581

Net Book Value 42,593 31,440 20,855

Total ASSETS 718,014 1,587,074 2,913,098

Owner’s Equity

Beg. Capital 190,619 718,014 1,587,074

Add: Net Income 736,112 1,277,630 1,991,495

Total 926,731 1,995,644 3,578,569

Less: Drawing’s 208,667 P408,570 665,471.43

Total Owner’s Equity 718,014 1,587,074 2,913,098

 44

APPENDICES

Gross Profit Ratio

The gross profit ratio is used to track on trend line, to see if a business can

continue to provide products at reasonable margin, where in you divide the gross

profit from the sales revenue.

Gross Profit
Formula: Gross Profit Ratio 
Net Sales

2019 2020 2021

758,415 1,300,326 1,934,929

1,750,000.00 2,311,800 2,966,691

= 43.34% = 56.25% = 65.22%

Net Profit Ratio

Net profit margin measures the profitability of a business after considering

the operating expenses.

Net Profit
Formula: Net Profit Ratio 
Net Sales

2019 2020 2021

736,112 1,277,630 1,991,495

1,750,000.00 2,311,800 2,966,691

= 42.06% = 55.27% = 67.13%

 45

Return on Asset

The return on asset is an indicator on how profitable and efficient the

management in utilizing assets to earn return.

Net Income
Formula: Return on Asset 
Average Total Asset

Year 1 Year 2 Year 3

736,112 1,277,630 1,991,495

718,014 1,587,074 2,913,098

= 1.03 = 0.81 = 0.68

Payback Period

Payback period is a measure of the expected number of years to recover the

total cash investment in the project.

Initial Investment
Formula: Payback Period  x10
Ave. Net Cash Flow

2018

190,619 = 3 months

675,471
 46

Annex

Annex A

Historical Demand

Average Rate of Client = (No. of Yes/No. of Samples) x 100

= (599/665)x100

= 90%

Consumption:

4 per week x 4 = 16 per month *10 = number of months per school year

16 per month x 10 = 160 per year

Population x rate = APC

2016 – 2017 = 18,537 x 85% = 15,756

2017 – 2018 = 16,505 x 85% = 14,029

2018 – 2019 = 17,576 x 85% = 14,940

Total No. of Sticks consumed per year

2016 – 2017 = 15,756 x 120 = 1,890,720

2017 – 2018 = 14,029 x 120 = 1,683,480

2018 – 2019 = 14,940 x 120 =1,792,801

 47

Projected Demand

Computation on the average increase of the projected demand.

Average Increase = [(Current year – Based year)/Based year] x 100

Ave. % of Increase = [(2,244,640 – 2,520,960)/ 2,520,960] x 100

= 10.96%

Ave. % of Increase = [(2,390,400– 2,244,640)/ 2244640] x 100

= 6.50%

*(10.96% + 6.50%)/2 = 8.73%

Year 1 = 2,390,400 x 108.73% = 2,599,082

Year 2 = 2,599,082 x 108.73% = 2825982

Year 3 = 2,825,981 x 108.73% = 3,072,689

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Annex B

Historical Supply

Competitors:

Cart 1 = 950, 975, 1,000

Cart 2 = 1,000, 1,000, 1,000

2016 – 2017

Cart 1 = 950 x 5 x 4 x 10 = 190,000

Cart 2 = 1000 x 5 x 4 x 10 = 200,000

390,000

2017 – 2018

Cart 1 = 975 x 5 x 4 x 10 = 195,000

Cart 2 = 1,000 x 5 x 4 x 10 = 200,000

190,000

2018 – 2019

Cart 1 = 1,000 x 5 x 4 x 10 = 200,000

Cart 2 = 1,000 x 5 x 4 x 10 = 200,000

400,000

Ave. Rate of Supply = [(Current year – Based year)/Based year] x 100

 49

Ave. % of Increase = [(395,000 – 390,000)/390,000] x 100

= 1.28%

Ave. % of Increase = [(400,000 – 395,000)/395,000] x 100

= 1.27%

*(1.28% + 1.27%)/2 = 1.28%

Year 1 = 400,000 x 101.28% = 405,120

Year 2 = 405,120 x 101.28% = 410,306

Year 3 = 410,306 x 101.28% = 415,557

 50

Annex C

Market Share

Unsatisfied Demand = Projected Demand – Projected Supply

Historical

Year 1 2,520,960 – 390,000= 2,130,960

Year 2 2,244,640– 395,000= 1,849,640

Year 3 2,390,400– 400,000= 1,990,400

Projected

Year 1 2,599,082– 405,120= 2,193,962

Year 2 2,825,982– 410,306= 2,415,676

Year 3 3,072,690– 415,557= 2,657,132

Projected Market Share

Production Capacity Rate = 350,000/2,193,962 *350,000 = 1,750 x 5 x 4 x 10

= 15.95%

Year 1 350,000 (Estimated)

Year 2 2,415,676 x 15.95% = 385,300

Year 3 2,657,132 x 15.95% = 423,813

 51

A FEASIBILITY STUDY OF TURON KING

AT MANGGA DISTRICT, VISAYAN VILLAGE, TAGUM CITY

Presented to
The Faculty of the Department of Accounting Education
UM Tagum College
Mabini St., Tagum City

In Partial Fulfilment of the

Requirement for MAS 1

Jennaiza Nissi Amod

Erwin Magallanes
Angelica Rose Mosende
Chessa Mae Paola Narbay
Mariel Tautho

October 2018
 52

TABLE OF CONTENTS

TITLE PAGE PAGE

TABLE OF CONTENTS i

LIST OF TABLES ii

LIST OF FIGURES iii

Chapter

1 INTRODUCTION

Objective of the Study 1

Methodology 1

Scope and Limitations of the Study 2

2 EXECUTIVE SUMMARY

Brief Description of the Project 3

Brief Profile of the Proponents 3

Project’s Contribution to the Economy 4

3 MARKETING PLAN

Description of the Products/Services 5

Comparison of the Product with its Competitors 5

Location 5

Market Area 7

Main Customers 7

Proposed Design of Rolling Store 7

Total Demand 9

Historical Demand 9
 53

Projected Demand 10

Total Supply 10

Historical Supply 10

Projected Supply 11

Demand and Supply Analysis 11

Market Share 12

Projected Selling Price 13

Sales Revennue 14

MARKETING STRATEGY 14

Promotional Measures and Marketing 14

Distribution Strategy 15

Pricing Strategy 15

Marketing Budget 15

4 PRODUCTION PLAN

Production Process 16

Tools and Equipment 19

Furniture and Fixture 19

Depreciation 20

Sources of Equipment 20

Planned Capacity 21

Terms and Conditions of Purchase Equipment 21

Cost of Direct Materials 21

Raw Materials Availability 23

Direct Labor 23
 54

Utility Expense 25

Store Supplies 26

Transportation Expense 27

Repair and Maintenance Expense 28

Business Permits and Licences 28

Honorarium of the Bookkeeper 30

Summary of Projected Operating Expenses 30

5 ORGANIZATION AND MANAGEMENT PLAN

Form of Business Enterprise 32

Management and Organization Structure 32

Management Qualifications and Functions 34

6 FINANCIAL PLAN

Financial Aspect 35

Major Assumption 35

Total Project Cost 36

Projected Income Statement 37

Projected Cash Flow 38

Projected Balance Sheet 39

APPENDICES

ANNEX
 55

LIST OF TABLES

Table Page

1 Historical Demand 9

2 Projected Demand 10

3 Historical Supply 11

4 Projected Supply 11

5 Demand and Supply Analysis 12

6 Projected Market Share 13

7 Projected Selling Price 13

8 Sales Revenue 14

9 Promotional Expenses 15

10 Tools Equipment 19

11 Furniture and Fixture 19

12 Depreciation and Amortization 20

13 Planned Capacity 21

14 Cost of Direct Materials 23

15 Projected Cost of Direct Materials 24

16 Cost of Direct Labor 25

17 Projected Cost of Direct Labor 25

18 Utility Expense 26

19 Projected Annual Utility Expense 26

20 Store Supplies 28

21 Projected Store Supplies Expenses 29

 56

22 Transportation Expense 29

23 Projected Repair and Maintenance 30

24 Business Permits and Licenses 31

25 Projected Business Permits and Licenses 31

26 Projected Honorarium of the Bookkeeper 32

27 Summary of Projected Operating Expenses 33

 57

LIST OF FIGURES

Figure Page

1 Vicinity Map 6

2 Rolling Store 8

3 Production Process of Proven 17

4 Production Process of Isaw 18

5 The Organizational Structure 35