Required Sales (to make us Happy)

To achieve a target of €100,000 per year in profits for the partnership, we would have to sell around 820 caskets per year.  This is assuming that we can sell them for at least €500 each, have variable costs of €350 per casket, and annual fixed costs of €23,000 per year.  

The variable costs were determined as follows: 

 - €250 per casket (which is what the undertaker pays for the caskets he sells to his custumers for €500);

 - €50 per casket for paint / printing material (W.A.G.)

 - €50 per casket for marketing (using Google Adsense) 

The fixed costs were determined as follows: 

 - €17,400 annuallly for the rental of workspace

 - €4,000 annually for equipment depreciation

 - €1,600 annually for interest on loan to buy printer (note: if we want to pay off the loan, we will need to spend an addition €3,400 per year to pay down the principle of the loan)

Based on these numbers (which I explain in further detail below), if we sell 1,000 caskets, our Earnings Before Taxes (EBT) will be €127,000 and the earnings per casket (epc) will be €127. If we sell 750 caskets, EBT will be €89,500 and epc would be €119.  If we sell 500 caskets, EBT would be €52,000 and epc would be €104.  To get an EBT of €100,000 we would have to sell 820 caskets.  

Equipment: 

For these calculations, I assumed that we would only utilize machines that were capable of printing pictures on wood (see a video of an example of one on YouTube: http://youtu.be/DrJhL2WOudg).  For a rough estimate of what one of these machines would cost, I looked at Alibaba.  The prices of similar printers on Alibaba.com vary from US$13,000 to US$20,000.  To be conservative, I used the most expensive printer for my calculations.  On top of the price listed on Alibaba, we would also have to pay for shipping and handling and import duties.  Therefore I assumed that one printer would cost €20,000.  As well, I am assuming that the printer's useful life is only 5 years, and that one printer can meet a demand of 1,000 caskets per year (or around 3 caskets per day).  For an example of this printer on Alibaba, click this link: http://www.alibaba.com/product-detail/plane-table-printers-multifunction-large-format_1965119375.html

Interest: 

The interested was determine from what I pay on my line of credit, prime plus 4%.  If we were to secure the loan against the printer, this financing cost will be much cheaper.