• Try to write narrative in memo format that describes your product, the costs to make your product, and how your product will be profitable.

1. Describe your product
   1. What is your product?
   2. How much are you going to sell your product for?
   3. What makes your product different?
   4. Who will your consumer be?
   5. How will you market/sell your product?
   6. Who are your competitors?
   7. Discuss how you will define your product cost in terms of direct materials, direct labor, and manufacturing overhead costs. Determine what your sales price will be.
      • What are the direct materials needed to make the product?
        • List out all of the items needed to make your product
      • How many employees will you need to make the product? How many estimated hours does it take to make the product?
      • What are your manufacturing overhead costs to make the product?
      • What is the total cost to make the product?
   8. Discuss different activities in the value chain and how these activities add value to your product.
      • Research & Development, Design, Production, Marketing, Distribution, and Customer Service
   9. Use your best estimates (you estimate the numbers)

• write an estimated annual income statement for year 1 which shows the profit or loss for your product

Show calculations for direct materials used, cost of goods manufactured, and cost of goods sold

• Make sure remember if your expenses are part of cost of goods sold or if they're an operating expense. Expenses are part of cost of goods sold if it is direct materials, direct labor, or manufacturing overhead. Do not double count expenses in both areas