CHAPTER 4

TECHNICAL ASPECT
The Technical Aspect is one of the most significant part of the study as it gives all
the technical details needed for the business to operate. This aspect determines the technical
soundness of a business. This aspect includes a lot of costing and processes such as the thorough
discussion of the technical specification of the proposed business, the raw materials that would
be utilized in making the product of the proposed business, the machineries, utilities and
equipment, the manufacturing processes involved in making the product, the office and plant
location, the labor requirements and production capacity, the manufacturing cost and cost per
unit and lastly there would also be a discussion about the proper waste disposal methods that
would be utilized by the proposed business.
Technical Specification of the Proposed Business
In the product specification, the required characteristics of the proposed product must be
clearly stated and documented in a manner that facilitate its procurement or production and
acceptance. The proposed product was different kind of furnitures made up of recycled materials.
The specifications of the business product are tables, chairs, bookshelves and other varities of
furnitures. Some of the recycled materials to be used would be tires, woods, papers/magazines,
fabrics and abaca or sisal rope. It is very significant to specify the business product in order to
serve as a reference point for all the consumers and to clarify what is out out of scope, this
reduces assumptions and expectations that may possibly arise.
Objectives of the Technical Aspect
1. To discuss the technical specification of the proposed business.

2. To determine the raw materials that would be used.

3. To determine the procedures in making the product
4. To determine the facilities, machineries, equipment and utilities needed for the business
5.
6.
7.
8.

and its cost.

To determine the labor requirements for each employee
To determine the location of the business and its plant layout
To determine the proper waste disposal methods that are applicable to the business.
To determine the unit production cost of the business.

Materials to be used in the Proposed Product of the Business

Direct Materials
The tables will present the direct materials that are to be used in making the product of the
proposed business. The description, quantity, unit cost, monthly cost and annual cost are
presented to determine the quantity of materials that are to be used for the period of operation.
This matters especially on the allocation of the budget that is given in every department. The
direct materials that are to be used are the following: old tires, plywood, abaca or sisal rope,
retired or old chair, wrecked tables, old or used magazines and fabrics. The budget presented for
the expenses in direct materials still varies and may subject to changes depending on the flow of
orders and availability of the materials.

Table 17
Sisal Table Top Glass
Direct Materials
SISAL TABLE TOP GLASS

Particulars

Description

Quantity

Unit Cost

Monthly Cost

tires
Abaca or Sisal
rope
Glass
Table Leg
Total

used tires

10

100

1,000

Annual
Cost
12,000

9 mm diameter

10

800

8,000

96,000

1/4'' thick
Bun Foot
-

10
40
-

450
100
1,350

4,500
4,000
17,500

54,000
48,000
210,000

Table 17.1
Upholstered Chair
Direct Materials
UPHOLSTERED OTTOMAN CHAIR
Particulars
Fabrics
tires
Table Leg
Fiber fill
Upholsery
foam
Total

Description
Colorful
Fabrics
used tires
Bun Foot
fiber fill
6 x 48 x 75
-

Quantity

Unit Cost

Monthly Cost

Annual
Cost

50

70

3,500

42,000

10
40
12

100
100
90

1,000
4,000
1,080

12,000
48,000
12,960

4
-

3,952.80
4,312.80

15,811

189,734

25,391.20

304,694

Monthly
Cost

Annual
Cost

Table 17.2
Weaved Chair
Direct Materials
WEAVED CHAIR
Particulars
Chair
Magazines
Total

Description
Retired/ old
chairs
Used/old
magazines
-

Quantity

Unit Cost

5 pcs

350

3,500

42,000

10 bundle

100

1,000

12,000

450

4,500

54,000

Table 17.3

Bench
Direct Materials

BENCH
Particulars
Chair
Plywood
Total

Description
Retired/ old
chairs
thick
plywood
-

Quantity

Unit Cost

Monthly Cost

Annual
Cost

20

350

7,000

84,000

355

2,130

25,560

705

9,130

109,560

Indirect Materials
The tables below shows the indirect materials and indirect costs that are to be used in the
production process of the proposed product of the business. The table presents the description,
quantity, per unit cost, monthly cost and the annual cost which is relevant in making a job order
costing. The indirect materials that are to be used on the products are the following:
Table 18
Sisal Table Top Glass
Indirect Materials

SISAL TABLE TOP GLASS

Particulars
wood glue
screw
varnish
Total

Description
Stikwel wood
glue
3.5 x 35 mm
clear varnish
-

Quantity

Unit Cost

Monthly Cost

Annual
Cost

10

92.5

925

11,100

20
10
-

34.10
146.08
273

682
1460.8
3,068

8,184
17,530
36,814

Table 18.1
Upholstered Chair
Indirect Materials
UPHOLSTERED OTTOMAN CHAIR
Particulars

Description

heavy duty
staples
nails

leg length
staples
1 " nails
polyester
thread
-

thread
Total

Quantity

Unit Cost

Monthly Cost

Annual Cost

10

359.55

3,595.50

43,146.00

10

43

430.00

5,160.00

10

39

390.00

4,680.00

441.55

4,415.50

52,986

Table 18.2
Weaved Chair
Indirect Materials
WEAVED CHAIR
Unit
Quantity
Cost

Monthly
Cost

Annual Cost

189.75

948.75

11,385.00

79.00

395.00

4,740.00

KL GI wire #16

70

70

840

338.75

1,414

16,965

Particulars

Description

paint

acrylic paint
glossy

glue

rugby all
purpose contact
cement

wire
Total

Table 18.3
Bench
Indirect Materials

BENCH
Particulars

Description

Quantity

Unit Cost

Monthly Cost

Annual Cost

nails

1 " nails
Exterior latex
paints
-

10

43

430

5,160

10

445

4,450

53,400

488

4,880

58,560

paint
Total

Process Flowchart
Figure 23
SORTING
DISASSEMBLING
FOLDING

REPAIRING
WEAVING
VARNISHING
OR PAINTING
PRODUCT
INSPECTION
PACKAGING
QUALITY
CONTROL
FINISHED
PRODUCT

The figure 23 shows the process in making the proposed product of the business. The
following steps are undertaken to ensure that the product had undergone to the due process of
production most importantly product inspection and quality control.
Manufacturing Process of the Proposed Product of the Business
The manufacturing process needed to produce the product that is either durable or nondurable. It will present a flowchart of production process and the flowchart presentation. The
proponents will use flowchart to show the flow of manufacturing the proposed product.
The Furniture made of recycled materials is produced through the following steps:

Step 1: Sorting
Preparation of the materials needed: old chair, rugby, old newspaper,
varnish, wires, old plank and paint brush.

Step 2: Disassembling
After sorting out the materials, the next step is to remove
all the nylon from the old chair and leave only the metal base.

Step 3: Folding
After removing the nylon, the next step would be folding.
Fold the newspaper according to the desired thickness and
length. Secure the ends with glue after.

Step 4: Repairing
To secure the seat part, cut and old plank and attach it to the
metal base using wires. This will serve as the base for weaving the
folded newspaper and an added factor for the chairs durability.

Step 5: Weaving
Weaving part is one of the most important thing in
making this product line. This would determine the base
appearance of the product.

Step 6: Varnishing or Painting

Apply varnish on the chair and allow it to dry for a couple of

hours.

Step 7: Product Inspection

The product must be thoroughly inspected to maintain its quality. This where product is
examined visually before is the product to the market. If there is the defect, the workers must go
back to the appropriate process. This process will ensure if the product is good and will
determine whether business meets its standards.

Step 8: Packaging
After passing through the inspection and testing process, the product will go through the
packaging process where normally the furniture are cling wrapped to avoid future damages and
scratches.

Step 9: Quality Control

Before finally storing the product, it must undergo quality control to ensure that the
product is free from any defects and blemishes. This process will ensure if the product is good
and will determine whether business meets its standards.

Step 10: Finished Product

The final step wherein the

product will be placed into

inventory. Therefore, meeting the

companys

standards

and

passing all the inspection and quality control process. It is now ready for market distribution.

Facilities, Equipment, Supplies and Utilities Needed for the Business, its Cost and
Availability
Figure 24

The proponents will rent a 128 square meter commercial space at San Gabriel, Malolos City,
Bulacan. The area of the space of building to be rented will be a concrete building style with 1
comfort room, 1 storage room, office area/sales area and space for the items to be sold. The unit
to be leased is a flood free zone, accessible to any kinds of transportation and near commercial
areas, schools and households.

The amount that will be spent on the rental expense includes the rental fee with an amount of
30,000 monthly which is to be multiplied in 12 months to get the annual rental fee of 360,000.
Additional expenses would be made during its first year, which would include three months
advance deposit of 90,000. Therefore, the total rent expense would amount to 450,000 for its
first year of operation.
Renovation
Renovation process would take place for the improvement of the proposed business
location. It is the remodelling process of improving the broken, damaged or outdated structure so
that the unit will be back in its good condition
Table 19
Mansory works
Quantity
Unit Cost
4
790.00
2
1,550.00
5
70.00
1
7,000.00
1
7,000.00
70
235.00
16,645

Particulars
Elf Sand
Gravel Sand
KL GI Wire #16
Glass Door
Roll up Door
Cement Bags
Total
Labor Cost

Total Cost
3,160.00
3,100.00
350.00
7,000.00
7,000.00
16,450.00
37,060.00
500.00

Table 19.1

Particulars
Hardiflex 4.5
Insolation
Firing Chanel
B. Rivet (1/8 1/2)
Total
Labor Cost

Quantity
8
1
24
850

Ceiling works
Unit Cost
485.00
2,350.00
98.00
0.50
2,933.50

Total Cost
3,880.00
2,350.00
2,352.00
425.00
9,007.00
425.00

Table 19.2

Particulars
Baldon Flat Latex
Baldon Gloss Latex
ACTY Colors
Paint Brass #2
Paint Brass #3
Roller Brass #2
Roller Brass #3
Total
Labor Cost

Quantity
4
4
3
2
2
2
2

Paint Works
Unit Price
480.00
560.00
85.00
80.00
80.00
80.00
80.00
1,445.00

Total Price
1,920.00
2,240.00
255.00
160.00
160.00
160.00
160.00
5,055.00
650.00

Table 19.3

Particulars
Flexible (1m)
Switch
Outlet
Breaker
Circuit Beaker
Junction Box
Utility Box
Electrical Wires 2.0mm (1m)
Electrical Wires 3.5mm (1m)
Electrical Tape

Electrical Works
Quantity
3
5
1
2
1
1
3
2
3
0
3
0
2

Total
Labor Cost
Table 19.4

Unit Cost

Total Cost

12.00

420.00

57.00

57.00

57.00

114.00

1,400.00

1,400.00

450.00

450.00

18.00

54.00

18.00

36.00

18.00

540.00

24.00

720.00

20.00

40.00

2,074.00

3,831.00
750.00

Particulars
sink
toilet
faucet
100mm DIA x 300 mm PVC PIPE
50mm DIA x 300 mm PVC PIPE
100 mm DIA WYE PVC
100 mm DIA x 50 WYE PVC
RED
100 mm DIA x 50 WYE TEE
RED
100mm DIA elbow PVC 90 DEG
100mm DIA PVC DEG
50mm DIA elbow PVC
100mm DIA PVC Coupling
50mm DIA PVC Coupling
PVC Solvent
100mm x 100mm floor drain
Far Flush type water closet
Total
Labor Cost

Plumbing Works
Quantity
Unit Price
4
2,000.00
1
3,600.00
6
450.00
3
583
2
291
3
120
1

94

1
1
1
2
1
1
1
1
1

94
126
59
58
74
45
45
80
1,200
8,919

Total Price
8,000.00
3,600.00
2,700.00
1,749.00
582.00
360.00
94.00
94.00
126.00
59.00
116.00
74.00
45.00
45.00
80.00
1,200.00
18,924.00
450

Table 19.5

Particulars
Floor tiles
Wall tiles
Adhesive cement
Tile grout
Total
Labor

Tile works
Quantity
Unit Price
360
90
150
20
25
250
2
60
420

Total Price
32,400
3,000
700
160
36,260
450.00

Machineries and Equipment

The machineries and equipment to be used would play significant role in the business
venture. The complete lists of these are presented in the following tables including their cost,

specification, quantity, cost per unit and its total cost.

Table 20
Machineries and Equipment for Production
Particulars
Heavy-Duty
Staple Gun
Airbrush Air
Compressor
Cordless Hand
Drill
Hand drill

Specification

Quantity

Cost per
Unit

Total Cost

764.55

764.55

23,416.2

23,416.2

2,518.6

2,518.6

2,384.55

4,769.1

TR250 Sharp Shooter Plus

Heavy-Duty Staple/Brad Nail
Gun
Pro Airbrush Air Compressor
Twin Piston w/ Tank 1/3 HP
LDX120C 20-Volt MAX
Lithium-Ion Cordless
Drill/Driver
1006VSR 3/8-Inch Keyless
Chuck Drill

Electric
Handheld
Sander

BDEQS300 1/4-Sheet Orbital

Sander

1,214.55

2,429.1

Grinder

PC60TAG 6.0-Amp 4-1/2-Inch

Angle Grinder

1,169.55

1,169.55

Electric Power
Hand Saw

Jigsaw 2-9/16 450W 4327M

6,599

6,599

2,699

2,699

1,709.55

1,709.55

11

42,475.6

46, 074.65

Bench Grinder

Homeowners
toolkit
Total

Bench Grinder 6 1/4HP

LBG125
248 65-Piece Homeowner's
Tool Kit w/ 60-100 10-Piece
Standard Fluted Screwdriver
Set and 90-947 6-Inch
MaxSteel Adjustable Wrench
-

Table 21
Office Equipment
Particulars

Description

Quantity

Unit Price

Total Cost

Computer Set

Inspiron 3650 4GB Intel

Core i3-6098P Desktop
with 21.5" Monitor

31,999

63,998

Printer

Multi-function Printer with

Ink Tank System

14,499

14,499

18,520

18,520

3,500

7,000

1,699

3, 398

1, 645
850

8, 225
1,700

5,995

5,995

68,518

104,017

Air conditioner

1.5 HP Split Type Aircon

with 3m Copper Tubing
Cyclone Fire Extinguisher

Fire extinguisher

Wall Fan
Exhaust Fan
Stand Fan
Industrial Stand
Fan
Total

10lbs ABC Dry Chemical

(Red)
16 Plastic Blade Orbit Fan
SOF 16E
12 Wall Exhaust Fan
16 Stand Fan
24 Industrial Fan
230 V 220 W
-

2
5
2
1
6

Furniture and Fixture

Furnitures and fixtures are movable articles that is incorporated with the real property and
regarded as real part of it. It is necessary useful and desirable for the business for a more
comfortable working environment.
Table 22
Office Furniture and Fixture

Particulars
Office Table
Office Table
Executive
chair
Sala Set

Compact Dining or Office Table with 4

Chairs
327 Office Table with cabinet

1
3

Unit
Cost
10,19
9
2,709

MT013 Office Chair

Mini Leather Sala Set

3
1

2,799
14,50

Description

Quantit
y

Total
cost
10199
8127
8397
14500

Chair
Top Table

Monoblock chair
Sumo rectangular Solid Slim Top Folding
Table

6
1

Total

0
400

2397.6

1,799
32,40
6

1799
45,419.6
0

Table 22 presents the office furnture and fixture that business would be needing on the
start of its operation. The following are compact dining or office table with 4 chairs, office table
for executive and operational works, executive chair, sala set for the customers, chairs and top
table.
Supplies
Supplies are those that would be necessary for the operation of the proposed in the
business, which includes maintenance supplies and office supplies that will be shown on tables
23 and 24.
Table 23
Office Supplies

Particulars

Description

Official
Receipt
Booklet

Columnar
Book, Wise
Buy
RCRD BK
Valiant
1000 Sheets
with
numbering

Stapler

Maped

Ledger
Record Book

Staples
Calculator

No. 35 Wise
Buy
WS-112H
CANON

Quantity

Cost per
Unit

Cost per
Month

Cost per
Year

25

50

55

110

1,32
0.00

200

600

7,20
0.00

180

180

30

30

378

378

60
0.00

2,16
0.00
36
0.00
4,53
6.00

Bond Paper

Paper One,
Short, 500
sheets per box

195

390

4,68
0.00

Carbon Paper

Old Town

20

33

660

7,92
0.00

1 box

47

47

175

175

1 set

60

60

70

70

18

90

1 box

25

25

12

72

35

175

Fastener
Puncher
Scotch Tape
Tape
Dispenser
Clip Double
Paper Clip
Ballpen
Pencil

Wise Buy, 50
SETS, 70MM
Plastic
HBW Office
Puncher
Tape Wise
Buy
HBW Office
Clip Double
Wise Buy, 10
per box
Snowman
Paper Clip
Faber Castell
(.5)
Mongol 2

1,53
8.00

Total

3,11
2.00

56
4.00
2,10
0.00
72
0.00
84
0.00
1,08
0.00
30
0.00
86
4.00
2,10
0.00
37,34
4.00

Table 23 presents the office supplies that the business will be needing during its
operation. The following supplies are ledger that would be necessary in recording the costs and
expenses that will be incurred by the business. Record book which will be used for recording
time table of the employees including their in and out. Official receipt which is necessary for
every operating business for proof of purchase and for taxation purposes of the BIR. Stapler,
staples, calculator, bond paper, carbon paper, fastener, puncher, scotch tape, tape dispenser, clip
double, paper clip, ballpen and pencil are list of office supplies that would be relevant in daily
operation of the business.
Table 24
Maintenance Supplies

Particulars
door mat
floor mop
toilet disinfectant
detergent
broom
dust pan
trashbin
handwash
pail
dipper
rags
Total

Quantity
2
1
2
2
4
2
7
2
4
4
20
50

Unit Price
100
80
275
350
85
60
100
88
45
25
3
1,211

Total Cost
200
80
550
700
340
120
700
176
180
100
60
3,206

Table 24 presents the particular maintenance supplies that would be needed in the
operation of the proposed business, the table includes the description and specifics, the quantity
needed, the cost per unit, and the total price that would amount if the supplies are bought in
accordance to the quantity needed by the proposed business.
Utilities
Utilities are the services provided to the public for general use. These utilities such as
water, electricity, telephone and internet, are very significant for a business operation. The
estimated electricity consumption, monthly electricity bill, estimated water consumption,
telephone and internet bill are shown by the tables below.
Table 25
Electricity Consumption

Particulars
Air con

Watts

# of Units

Total
Watts

Kilowatt

Hours

990

1980

1.98

Kilowatt
KWH per day
per hour
15.84

380.16

Computer

250

500

0.5

96

Electric Fan

55

220

0.22

1.76

42.24

Industrial
Stand Fan

220

220

0.22

1.76

42.24

Exhaust Fan

30

150

0.15

1.2

28.8

Printer

30

30

0.03

0.24

5.76

Fluorescent
Lamps

48

0.048

0.384

9.216

Light Bulbs

25

0.025

0.2

4.8

Grinder

470

3290

3.29

26.32

631.68

Total

1,240.90

Table 26
Monthly Electricity Bill

Bill Subgroup

Rate

Total KHW per day

Total

Generation

3.856

1,240.90

4,784.91

Transmission

0.9219

1,240.90

1,143.99

System Loss

0.4204

1,240.90

521.67

Contribution (Meralco)

2.8423

1,240.90

3,527.01

Subsidies

0.1161

1,240.90

144.07

Government Taxes

0.9798

1,240.90

1,215.83

Universal Charges

0.3524

1,240.90

437.29

Fit-All (Receivable)

0.0406

1,240.90

50.38

Other Charges

1,240.90

0.00

Total

11,825.16

Table 27
Utilities

Particulars

Estimated Monthly
Consumption

Estimated Annual
Consumption

Electricity

11,825.16

141,901.92

Water

350

4,200.00

Telephone and Internet

1,299

15,588.00

Total

161,689.92

Labor Requirements
The proposed business requires 3 production workers for the normal operation, classified as the
direct labor. The four workers. The workers will work 8 hours a day and 5 days a week from 8:00
a.m. to 5:00 p.m. Overtime and day-off will vary.
Table 28
Direct Labor Cost

3 workers

Per Hour Pay Scale

Daily Pay Scale

Gross Monthly Pay Scale

150

1,200

24,000

Table 27 presents the direct labor cost at an hourly pay scale of 50 per worker. To get the
daily pay scale, multiply the hourly pay scale by 8 working hours ( 50 x 8 hours ) amounting to
400 per worker. To get the gross monthly pay scale, multiply the daily pay scale by 20 working
days ( 400 x 20 days ) amounting to 8,000 per worker and to get the total monthly direct labor

cost, multiply the gross monthly pay scale by the number of workers ( 8,000 x 3 ) amounting to
24,000.
Work Schedule
The business would be open from Monday to Saturday. Its staff and workers will work from
8:00am in the morning until 4:00PM in the afternoon. The proposed business will not be open
though on special holidays such as New Year, Good Friday.
Location of the Business and its Plant Layout
The total land area of one hundred and twenty-eight (128) square meters will be utilized
by the proposed business. This includes the, office area, reception area, display area, production
area and stockroom. The plant layout is shown below in figure

Figure 25

Location of the Business

Figure 25 shows the location of the business which would be in San Gabriel, Malolos
Bulacan. The location specified is flood free and near the schools, houses and malls. There is
also easy accessibility in terms of transportation.

Figure 26

Floor Plan

Proper Waste Disposal Methods

When waste is disposed of properly. It helps to prevent additional pollution which can
improve public health. Polluted air increases the risk of respiratory illness. Proper Waste
Disposal is critical due to the fact that certain types of waste also have the potential to cause
disease or get into water supplies. There are rules and regulations in place for how specific types
of waste should be disposed. Every company to avoid hazards to the environment. The business
will provide trash containers and dispose waste by segregating the biodegradable from the nonbiodegradable.

Manufacturing Cost per Unit

Manufacturing cost per unit is computed by adding the direct materials, fixed factory
overhead, variable factory overhead, and the direct labor for producing each job order for sisal
table top glass, upholstered ottoman chair, weaved chair and the bench
Table 29
Manufacturing Cost per Unit
SISAL TABLE TOP GLASS
Direct Materials
tires
Abaca or Sisal rope
Glass
Table Leg
Total Direct Materials
Factory Overhead
Variable
wood glue
screw

Per Unit Costs

100
800
450
100
1,450.00

92.5
34.10

varnish
Fixed
rent for space

146.08

Total Factory Overhead

701.68

429.00

Direct Labor
Workers Salary

150
2,301.68

Total Manufacturing Costs per unit

Table 29.1
Manufacturing Cost per Unit

Direct Materials
Fabrics
tires
Table Leg
Fiber fill
Upholsery foam
Total Direct Materials

UPHOLSTERED OTTOMAN CHAIR

Per Unit Costs

Factory Overhead
Variable
heavy duty staples
nails
thread
Fixed
rent for space
Total Factory Overhead
Direct Labor
Workers Salary
Total Manufacturing Costs per unit

70
100
100
90
494.10
854.1

359.55
43
39
429
870.55

150
1,874.65

Table 29.2
Manufacturing Cost per Unit
WEAVED CHAIR
Per Unit Costs

Direct Materials
Chair
Magazines
Total Direct Materials

350
100
450

Factory Overhead
Variable
paint
glue
wire
Fixed
rent for space
Total Factory Overhead

189.75
79
70
429
767.75

Direct Labor
Workers Salary

150
1,367.75

Total Manufacturing Costs per unit

Table 29.3
Manufacturing Cost per Unit
BENCH
Direct Materials
Chair
Plywood
Total Direct Materials
Factory Overhead
Variable
nails
paint
Fixed

Per Unit Costs

350
355
705

43
445

rent for space

Total Factory Overhead

429
488

Direct Labor
Workers Salary

150

Total Manufacturing Costs per unit

1,343.00