TUTORIAL 2 TESTING THE PRE- PRODUCTION STRATEGY Part 2 - Steps to enter the fixed production costs, capital budget, research schedule, and indirect costs.

USING THE SLIDE PRESENTATION  This slide presentation is fully interactive. Although it has been pre-programmed to advance automatically, you may override these times by using your mouse.  Pressing the right mouse button will pause the program and provide you with a menu which allows you to expand the view of the slides to Full Screen and move backwards or forward through the slides.  Alternatively you may click on the scroll bar on the right of the slide to move forwards or backwards through the slides.

What You Will Learn  After completing Part 1 you will be able to enter the sales and variable production costs for your new product.  After completing Part 2 you will be able to enter the fixed production costs, a capital budget, the research schedule, and indirect fixed costs.  After completing Part 3 you will be able to test the financial feasibility of the Prototype Stage and enter the financing plan.

Steps to Test the New Product Strategy Step 1 Test the viability of your product concept Step 2. Develop and test your Pre-production strategy Step 3. Develop and test your Commercialization strategy

TABS IN THE NEW PRODUCT TEMPLATE Welcome - This tab links the New Product Template to the Online Course Menu - This tab provides a menu to help navigate through the New Product template as well as links to these tutorials. Concept - This worksheet will test the feasibility of your new product concept. Prototype - This worksheet will test the feasibility of your Pre- production strategy. Full Production - This worksheet will test the feasibility of your Commercialization strategy. Summary Statements - Provides a series of proforma financial statement summaries.

HOW TO SET UP PROTOTYPE WORKSHEET Step 1 Enter the sales and variable production costs Step 2. Enter the fixed production costs Step 3. Enter the capital budget Step 4. Enter the research and I.P. costs Step 5. Enter the indirect costs Step 6. Check the Cash Flow and enter the financing sources Step 7. Enter the details of any new loans You may work directly in the Prototype worksheet or use the menu found in the Menu tab to help enter the data.

FIXED PRODUCTION COSTS Follow the Numbered Orange Dots to Enter the Fixed Production Cost Data In the Menu page click Fixed production costs. This will take you to the Prototype worksheet. 1 Click on CONTRIBUTION SUMMARY in the Prototype Stage Navigation System 2

Enter the Fixed Production Costs for the Prototype Stage Enter the Fixed Production Costs for each year of the of the Prototype Stage. Initially, make the costs the same for each year. Later you can change the values. You may enter data into any of the blue shaded areas. 3

CAPITAL BUDGETS Follow the Numbered Orange Dots to Enter the Capital Costs. Click on CAPITAL BUDGETS in the Prototype Stage Navigation System 2 To return to the Prototype Stage Navigation System press the keys on your computer. (Press the key while holding down the key. 1

Enter the Capital Purchases for the Prototype Stage Enter the Capital Purchases for each year of the of the Prototype Stage. You may enter data into any of the blue shaded areas. 3

Enter the Capital Disposals for the Prototype Stage Enter the Capital Disposals for each year of the of the Prototype Stage. You may enter data into any of the blue shaded areas. 4 Enter the Amortization Rate. 5

RESEARCH AND I.P. COSTS Follow the Numbered Orange Dots to Enter the ResearchCosts. Click on RESEARCH SCHEDULE in the Prototype Stage Navigation System 2 To return to the Prototype Stage Navigation System press the keys on your computer. (Press the key while holding down the key. 1

Enter the Research activities and their associated cost in each year of the Prototype Stage. 4 Enter the I.P. Costs, Research Costs and Research Grants For Each Year of the Prototype Stage Enter the I.P. activities and their associated cost in each year of the Prototype Stage. 3 Enter the source and amounts of any research grants. 5

INDIRECT FIXED COSTS Follow the Numbered Orange Dots to Enter the Indirect Fixed Costs. Click on SALES & EXPENSES SUMMARY in the Prototype Stage Navigation System 2 To return to the Prototype Stage Navigation System press the keys on your computer. (Press the key while holding down the key. 1

Enter the Indirect Costs for the Prototype Stage Enter the Indirect Fixed Costs for each year of the of the Prototype Stage. Initially, make the costs the same for each year. Later you can change the values. You may enter data into any of the blue shaded areas. 3

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