Manufacture of Toy Boats

In the manufacture of boats, it is very important to consider the materials to be used for making the toy boat. The choice of a material depend on the design, availability, and the resulting manufacturing cost. Plastics makes a good choice for material in the toy industry as it can be molded into any shape, are waterproof and can absorb any color. The use of plastic is cheap and allows mass production of the toys. Some types of toy boats may be made from wood or may have wood included in the design. The use of wood calls for a handmade process which limits the level of mass production that can be used to manufacture the toys. 

The first step in the manufacturing process involves design and prototyping. From the concept of the toy boat to be made, the design is made from top to bottom. This is followed by prototyping in form of 3D, rapid prototyping, sculpting, molding, and casting. The model is then reviewed for approval then painted. 

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The toys boats are then passed to the production process for mass production. The toy boats are made from a different material. The individual part is fabricated then assembled and package. A very critical component of the production process is on quality control. Our approach involves several stages QC tests that even bring third-party inspectors.

The completed products are packaged in readiness for shipping and delivery. Our rule is that we only ship to our customer great toys. Independent inspects do random checks to ensure that the delivered toy boats exceed our quality expectations.


Sales budget

Selling Price= $12

MonthsJanuaryFebruaryMarchTotal (1st Quarter)
Sales Units (Q)8,00012,00015,00035,000
Sales Revenue$96,000$144,000$180,000$420,000

Direct Material budget

Direct MaterialsJanuaryFebruaryMarchTotal (1st Quarter)
Modelling clay$3,000$3,000$3,000$9000
Clothing roll$6,000$7,500$10,000$23500
Electrical components$10,000$15,000$18,000$43000

Manufacturing Overheard Budget

OverheadJanuaryFebruaryMarchTotal (1st Quarter)
Machine maintenance$500$500$500$1500

Selling and Administrative Expenses

Selling ExpensesJanuaryFebruaryMarchTotal (1st Quarter)
Office Administration$2000$2000$2000$6000
Sales Commissions$4800$7200$9000$21000

Income Statement

ItemJanuaryFebruaryMarchTotal (1st Quarter)
Less (cost of goods)($60,000)($87,000)($100,500)($247,500)
Gross profit$36,000$57,000$79,500$172,500
Less operating expenses
Machine maintenance$500$500$500$1,500
Office Administration$2,000$2,000$2,000$6,000
Sales Commissions$4,800$7,200$9,000$21,000
Net Profit/Loss($25,300)($6,700)$14,000($68,000)

Classification of costs

Cost ItemClassification
Modelling clayVariable
Clothing rollVariable
Electrical componentsVariable
Machine maintenanceFixed
Office AdministrationFixed
Sales CommissionsVariable

Contribution margin Statement

Sales Revenue$420,000
Variable costs$268500
Contribution Margin$151500
Fixed cost$219500
Net Income$(68000)

Breakeven Analysis

Fixed cost$219500
Variable costs$268500/35000= $7.67/product
(Price –Variable cost)$4.33
Breakeven (quantity)Fixed cost/(Price –Variable cost $219500/$4.33= 50692 units  
Breakeven (revenue)$608314
Units required to make a profit of $ 500051110  

Trends in Toy Industry

The toy market is considered as having consumers who are price sensitive. The industry is also faced with low barriers thereby making it very competitive for the few companies engaged. Companies are known to contract a third party company for carrying out the manufacturing process.  This triggers a potential problem in that the companies may lose the control in relation to products’ safety and regulation. The engaging in international market is faced by the issue of strengthening US dollar making the products expensive in other countries. The companies also ends up losing money in foreign exchange where exports are quoted in destination market’s currency.

The toy companies are categorized within the larger play industry that also include video games, apps, and a link to the digital world. The inclusion of 3D Printing is a new trend that the company will surely adopt.

The major toy companies in the United States include Mattel, Hasbro and Jakks companies. A check in the performance of these four competitors by checking three metrics which includes performance in the emerging markets, licensing, and level of innovation. The weighted scores on performance in emerging markets for the three companies, Mattel, Hasbro, and Jakks companies include 0.9, 0.9, and 0.45 respectively. In terms of licensing, the weighted scores for Mattel, Hasbro, and Jakks are 1.05, 1.4, and 0.7 respectively. The weighted scores for innovations are 0.3, 0.5, and 0.2 respectively. Using these measures of success, it emerges that Hasbro is on top with a weighted score of 2.8, followed by Mattel with 2.25, and finally Jakks Pacific with a score of 1.35. The company will thus need to be aware and strategize on how to gain a competitive edge (Cook, 2016).

Capital investment

To increase the scale of production and move into mass production, the company will invest in the following machines: Injection machine is highly useful in making different kinds of products using plastics raw materials such as PVC, ABS, TPR<PP., HIPS PC, POM. This machine will be useful as it deals with a different kind of material either soft or hard material. This will also allow the molding of different shapes on the boats.  The use of this machine is more beneficial as compared to others such as roto-casting machines which can only deal with products made from Vinyl plastic material. The consideration for acquiring will be on the financial implication to the company. The company may acquire a loan to enable it to acquire this product (Kwang, 2015).


Cook, O. (2016). Toy Industry Analysis. Retrieved from

Kwang, S. (2015). Kinds of Machines that Required to Make Plastic Toy and Promotion Items. Retrieved from

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