Wednesday, June 10, 2015

P.F.S./Biz Plan1 Lesson 7: Investment and Production Costs

I.Time Frame:
1. Date: June 9 and 11, 2015
2. Number of Hours: 3 Hours
3. Time: 930 - 1130

II. Class Schedule:
1. Course Code:
2. Course Title: Business Plan 1
3. Year: BS Entrepreneurship 3
4. School: DWCL

III. Objectives
1. Distinguish between Direct and Indirect Cost
2. Compute Cost of Production Per Unit

IV. Subject Matter
1.Estimated Investment Costs, Product Costs and Cost Based Pricing
2 References:
Cuyugan
Business and Economic Terms: Villegas and Quesada




V. Procedure
1. Daily Routine
a. Checking of Attendance

2..Vocabulary Building
a. Costs
Cost - expense incurred in the production of a biz output

1. Investment Costs
Investments - tangible and intangible assets which are purchased for which future benefits are expected

2. Production Cost
a. Direct Cost
Machineries and merchandise
Granting of study grants
Scholarships and seminars

b. Indirect Cost
Indirect Cost - cost that is not directly related to the production
Ex: wages, canteen facilities

a. Start-Up Costs: These are the costs incurred in starting up a new business, including “capital goods” such as land, buildings, equipment, etc. The business may have to borrow money from a lending institution to cover these costs.

b. Operating Costs: These are the ongoing costs, such as rent, utilities, and wages that are incurred in the everyday operation of a business.   The total should include interest and principle payments on any debt for start-up costs.

3. Pre-Discussion
a. Students will be given Starting a Business brochures from DTI.
b. Students will be given time to study the brochures
c. Students will create their Investment Costs and Prouction Costs based on their chosen business

4. Discussion
a. Engagement Activity
1. How do you compute Investment Cost, Production Cost and Cost Base Pricing
2. Give other examples of direct and indirect cost


VI. Assessment
1. Short Quiz

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