Variable Cost per lens pair

Manufacturing Cost $ 0.03200 Injection Mold Cost per lens $ 0.00080 Cost of plastic box $ 0.00040 Filling cost of box $ 0.00056 Order Processing $ 0.00072 Total Variable Cost $ 0.03448

Break-even analysisSales Price $ 0.08 Variable costs per pair $ 0.03448 Contribution Margin $ 0.04552 Fixed Costs $ 955,000.00 Break-even point 20,979,789.10 Break-even Sales $ 1,678,383.13

Annual Fixed Cost (for 1st year)

Payment to New World Plastics $ 25,000.00 Regional Office and Warehouse in California $ 196,000.00 Headquarter Cost $ 184,000.00 Advertising $ 100,000.00 Trade Shows $ 100,000.00 Salespersons cost $ 280,000.00 Technical representative cost $ 70,000.00 Total Fixed Costs $ 955,000.00

(Assuming volume at 20 million pair in 1st year)

521 (Exhibit 3)No. of Salespersons 7No. of Technical representatives 2

No. of farms in california with flock size greater than 20000

Reduction in MortalityEarlier Mortality 9%New Mortality 4.5%Savings 4.50%

Purchase Cost per hen $ 2.40 (Exhibit 5)Allocation for replacing dead birds $ 0.21 Percentage 8.75%Expected new mortality 4.50%New Allocation $ 0.11 Savings per bird $ 0.1020 Interest Savings (Exhibit 5 - 8% interest cost on laying stock)Savings per Dozen Eggs $ 0.0046

Total Annual Savings per Bird $ 0.3695 Total Savings per Dozen Eggs $ 0.0168 Total Cost of Lens to farmer per bird $ 0.08 Total Economic value added per bird $ 0.2895

Flock Size 20000 50000 100000Total Savings $ 5,790.01 $ 14,475.03 $ 28,950.07

Feed SavingsFeed per 100 birds at 2" deep 24.46Feed per 100 birds at 1" deep 23.68Savings per 100 birds per day 0.78 poundsSavings per bird per day 0.0078 poundsSavings per bird per day $ 0.000559 Annual Savings per Bird $ 0.2040 Annaul Savings per Dozen Eggs $ 0.0093

Interest Savings (Exhibit 5 - 8% interest cost on laying stock)Laying Costs Savings per Bird $ 0.1020 Interest Savings (@8%) per bird $ 0.0082 Interest Savings per Dozen Eggs $ 0.00037

Debeaking Trauma LossNo. of eggs lost annually per bird 2.4Cost per egg $ 0.0227 Total Cost savings per bird $ 0.055 Total Cost Savings per Dozen Eggs $ 0.0025

Labor SavingsLabor Cost for debeaking per hour $ 7.50 No. of birds debeaked in one hour 220Cost per bird $ 0.0341 Labor Cost for installation of lenses $ 7.50 No. of birds lenses installed in one hour 225Cost per bird $ 0.0333 Savings per bird $ 0.0008 Savings per Dozen Eggs $ 0.00003