Brehm Vineyards
Autor: bpiuzzi • February 14, 2016 • Case Study • 421 Words (2 Pages) • 682 Views
Brehm Vineyards
Production = 8,000 cases @ 12 bottles per case = 96,000 bottles per year
Good season = 10,000 cases @ 12 bottles per case = 120,000 bottles per year
Bad season = 5,000 cases @ 12 bottles per case = 60,000 bottles per year
Sell Price = $120 per case ($10 per bottle)
a) Flexible Budget assuming 8,000 cases of wine
| Fixed Cost | Variable Cost | Volume (cases) |
Grape Costs | $240,000 | $2.10 | 8,000 |
Labor | $75,000 | $2.15 | |
Packing | $- | $14.00 | |
Selling and Admin Costs | $36,000 | $- | |
Utilities | $4,000 | $0.75 | |
Revenues @$120/cs | $960,000.00 | ||
Grape Costs | $256,800.00 | ||
Labor | $92,200.00 | ||
Packing | $112,000.00 | ||
Selling and Admin Costs | $36,000.00 | ||
Utilities | $10,000.00 | ||
Total Costs | $507,000.00 | ||
Net Income | $453,000.00 |
b)
Fixed costs = $355,000
Variable Costs = $19 (adding all variable costs)
MSRP = $120 per case
Break-even = $355,000/($120-$19)
Brea-even = 3,514.85 cases
c)
$300,00/(1-40%) = $500,000
# of cases = ($500,000 + $355,000)/($120-$19)
# of cases = 8,466 cases
d)
| Fixed Cost | Variable Cost | Budgeted Total Cost | Actual Costs |
Grape Costs | $240,000 | $2.10 | $252,600.00 | $260,000 |
Labor | $75,000 | $2.15 | $87,900.00 | $98,000 |
Packing | $- | $14.00 | $84,000.00 | $83,000 |
Selling and Admin Costs | $36,000 | $- | $36,000.00 | $39,000 |
Utilities | $4,000 | $0.75 | $8,500.00 | $8,800 |
Budgeted | Actual | Difference | Outcome | |
Revenues @$120/cs | $720,000.00 | $840,000.00 | $120,000 | F |
Grape Costs | $252,600.00 | $260,000.00 | -$7,400 | U |
Labor | $87,900.00 | $98,000.00 | -$10,100 | U |
Packing | $84,000.00 | $83,000.00 | $1,000 | F |
Selling and Admin Costs | $36,000.00 | $39,000.00 | -$3,000 | U |
Utilities | $8,500.00 | $8,800.00 | -$300 | U |
Total Costs | $469,000.00 | $488,800.00 | -$19,800 | U |
Net Income | $251,000.00 | $351,200.00 | $100,200 | F |
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