Assume you are creating a Lego kit to resell. Also, assume that you are presenting this project to the Vice President of Product
and Marketing Development and the Vice President of Sales who requires a two page – back and front – deliverable. This
deliverable is worth 60% and the actual creation is worth 40%. Your deliverable should be a handout which will allow the VPs to
determine if the company wishes to invest in the product and sell the item in the company.
When determining the cost of the product, assume the following costs for the Lego bricks in determining the cost of your
Costing: Direct Materials Cost: Lego Plates: 5 cents each (these are the flat Lego pieces); Lego Bricks: 8 cents each; Lego Special
Pieces: 10 cents each (if the piece is not a plate or a normal Lego brick, it should be classified as a special piece
Direct Labor Cost: Direct labor costs are recorded at 60% of your total direct materials cost.
Manufacturing Overhead Cost: Manufacturing overhead costs are recorded at 45% of your direct labor cost.
Required: You should create a two-page deliverable in a professional manner that provides information about your
creation. Your deliverable will be judged on creativity and the informational content of the report You will be judged on the information you present about the creation you have built. At a minimum, your report should contain the following:
· A unique name for your creation along with the selling price of your Lego Kit. Make sure you use creativity in choosing the name of your creation. Explain why you have chosen this name.
· Clearly state the selling price you have set for your creation. Comment on the reasonableness of the selling price of your creation and explain how you calculated the selling price.
· A discussion of the types of costs associated with manufacturing the Legos for your creation. This does not include the dollar amount of costs, just the TYPES/DESCRIPTION of costs. Think through the manufacturing process and include all of the types of costs that you can identify that would be used in this manufacturing process – minimum ten different, unique types of costs. (Think about obvious types of items used in any manufacturing process.)
You MUST INCLUDE a flowchart depicting the manufacturing process WITH EACH STEP LABELED CLEARLY.
Instead of a flowchart, you could use another interesting approach for presenting the information in a diagram form.
Diagram in as much detail as you can, the process for your Lego creation from start to finish (finish being when you sell the product.
· Include in your written deliverable at least one picture of your creation in addition to the picture on the cover sheet.
· For distance students, Lego projects will be completed using the Lego Digital Designer 4.3 on Lego.com or using your own Legos. The Lego project will be an individual project for distance students. On campus students may not use the Lego Digital Designer. Distance students should include ONE ADDITIONAL PAGE THAT HAS ONLY A PICTURE OF THEIR CREATION ON IT AND THE NAME OF THE CREATION.
· Summarize all costs of production in a Production Cost Sheet format. You should show number of pieces in detail and show totals for all parts of the production process. Include your computation of selling price in this section as well. Make sure that this section is clearly presented.
– Selling Price Breakdown
– Production Process
– Production Cost
– Direct Materials= Cost of Material for brick, =Cost of Packaging, =Cost of paint for brick
– Direct Labor= Labor Cost for production of brick, = Labor Cost to paint brick specific color, = Labor Cost for packaging and checking for defects
– Overhead Cost= Depreciation on painting and manufacturing, = Factory utility expenses, = Indirect Materials needed to paint bricks, =Indirect Materials needed for package lego kit
Direct Material Breakdown
Total Cost of Good Manufactured and Selling Price breakdown