RMIT Classification: Trusted #_x000D_

Coffee Cube
Fill in the cells shaded yellow. Baseline 'What if' Scenario

Sales volume (bags per year) 25,000 25,000

Average selling price ($/bag) 42.00 42.00
variable cost ($/bag) 22.00 14.70
fixed cost ($/year) 419,981 639,981
marginal income tax rate 20% 20%

Contribution margin ($/cup) 20.00 47.6% 27.30

Break-even sales volume (bags/year) 20,999 23,443

Break-even sales revenue ($/year) 881,960 984,586
Margin of safety ($/year) 168,040 65,414

Budget $'000 $'000

sales revenue 1,050.0 100.0% 1,050.0
LESS variable cost (550.0) -52.4% (367.5)
contribution margin 500.0 47.6% 682.5
Less fixed costs (420.0) -40.0% (640.0)
operating profit before tax 80.0 7.6% 42.5
LESS provision for income tax (16.0) -1.5% (8.5)
operating profit after tax 64.0 6.1% 34.0

𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑚𝑎𝑟𝑔𝑖𝑛 =𝑠𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒 −𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡

𝑜𝑓𝑖𝑡=(■8(𝑠𝑎𝑙𝑒𝑠@𝑣𝑜𝑙𝑢𝑚𝑒)×■8(𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑚𝑎𝑟𝑔𝑖𝑛@𝑝𝑒𝑟 𝑢𝑛𝑖𝑡))−■8(𝑓𝑖𝑥𝑒𝑑@𝑐𝑜𝑠𝑡𝑠)

𝑎𝑙𝑒𝑠@𝑣𝑜𝑙𝑢𝑚𝑒)=(𝑓𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡𝑠+𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑝𝑟𝑜𝑓𝑖𝑡 𝑏𝑒𝑓𝑜𝑟𝑒 𝑡𝑎𝑥)/(𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑚𝑎𝑟𝑔𝑖𝑛 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡)

For break even, put profit = 0.

 RMIT Classification: Trusted #_x000D_

What if' Scenario 𝑝𝑟𝑜𝑓𝑖𝑡=(■8(𝑠𝑎𝑙𝑒𝑠@𝑣𝑜𝑙𝑢𝑚𝑒)×■8(𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢

Profit ($'000)
800

600

65.0%
400

200

100.0%
-35.0% 0
0 5 10 15 20 25 30 35
65.0%
-61.0%
4.0% (200)
-0.8%
3.2%
(400)

(600)

(800)

Sales Volume (thousand bags)

 RMIT Classification: Trusted #_x000D_

𝑎𝑙𝑒𝑠@𝑣𝑜𝑙𝑢𝑚𝑒)×■8(𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑚𝑎𝑟𝑔𝑖𝑛@𝑝𝑒𝑟 𝑢𝑛𝑖𝑡))−■8(𝑓𝑖𝑥𝑒𝑑@𝑐𝑜𝑠𝑡𝑠)

5 30 35 40 45 50

ousand bags)
Coffee Cube Pty Ltd
Operating Budget
Quarter ending 30 Jun 2022 30 Sep 2022 31 Dec 2022

Sales Budget
Sales volume (kg) 6,250 5,938 5,641
Selling price ($/kg) 42.00 44.00 44.00

Cost Budget
variable costs ($/kg roasted coffee sold)
green coffee 17.50 18.38 19.29
pakaging 0.95 0.95 0.95
labour 3.05 3.05 1.83
overheads 0.50 0.50 0.50
22.00 22.88 22.57

contribution margin ($/kg) 20.00 21.13 21.43

fixed costs ($)

wages (fixed part) 57,000 57,000 57,000
rent 16,000 16,000 16,000
insurance 2,800 2,800 2,800
utilities 4,000 4,000 4,000
repair & maintenance 1,500 1,500 1,500
logisitics (fixed part) 2,000 2,000 2,000
advertising 2,400 4,800 4,800
information technology 3,000 3,000 3,000
depreciation and amortisation 15,000 15,000 17,000
miscellaneous costs 1,295 1,295 1,295
104,995 107,395 109,395

Profit Budget
Sales revenue 262,500 261,250 248,188
LESS variable costs (137,500) (135,820) (127,330)
Contribution margin 125,000 125,430 120,857
LESS fixed cost (104,995) (107,395) (109,395)
Operating profit before tax 20,005 18,035 11,462
LESS income tax (4,001) (3,607) (2,292)
Operating profit after tax 16,004 14,428 9,170

Data for cash budget

cash received from customers
from prior quarter sales 30% 78,750 78,375
from current quarter sales 70% 182,875 173,731
Cash paid to employees
labour (variable) (19,063) (18,109) (10,322)
wages (fixed part) (57,000) (57,000) (57,000)
Non-cash costs
depreciation and amortisation (15,000) (15,000) (17,000)

Other costs (trade suppliers) (151,433) (153,106) (152,403)

payment to suppliers
for prior quarter costs 15% (22,715) (22,966)
 for current quarter costs 85% (130,140) (129,542)

Cash budget
Cashflow from operating activities
cash received from customers 261,625 252,106
cash paid to suppliers (152,855) (152,508)
cash paid to employees (75,109) (67,322)
cash paid to tax office (4,001) (3,607)
net cashflow from operating activities 29,660 28,669
Cashflow from investing activities
acquisition of bagging machine (8,000) (72,000)

net cashflow from investing activities (8,000) (72,000)

Cashflow from financing activities
payment to lenders (interest) (6,236) (6,236)
payments to owners (dividends) (20,000) (10,000)
net cashflow from financing activities (26,236) (16,236)

Net cash flow (4,576) (59,567)

cash at bank at beginning of quarter 83,500 78,924
cash at bank at end of quarter 83,500 78,924 19,356

Parameters
income tax rate 20%
CPI increase 6%

current cost of green beans ($/kg) 18.75 https://www.sopranocoffee.com.au/bulk-16kg-

20.00 https://ministrygrounds.com.au/product-catego
17.00 https://rebelroasters.com.au/product-category/
 Fill-in the cells shaded green.
31 Mar 2023 30 Jun 2023 year ending
30-Jun-23

5,641 6,205 23,423

44.00 44.00

20.26 21.27
1.01 1.01
1.94 1.94
0.53 0.53
23.74 24.75

20.26 19.25

60,420 60,420 234,840

16,000 16,000 64,000
2,968 2,968 11,536
4,240 4,240 16,480
1,590 1,590 6,180
2,120 2,120 8,240
5,088 5,088 19,776
3,180 3,180 12,360
17,000 17,000 66,000
1,373 1,373 5,335
113,979 113,979 444,747

248,188 273,006 1,030,631

(133,882) (153,555) (550,587)
114,306 119,452 480,045
(113,979) (113,979) (444,747)
327 5,473 35,297
(65) (1,095) (7,059)
262 4,378 28,238

74,456 74,456
173,731 191,104

(10,942) (12,036)
(60,420) (60,420)

(17,000) (17,000)

(159,499) (178,077)

(22,860) (23,925)
 (135,574) (151,366)

248,188 265,561 1,027,479

(158,434) (175,291) (639,088)
(71,362) (72,456) (286,249)
(2,292) (65) (9,966)
16,099 17,749 92,176

0 0 (80,000)

0 0 (80,000)

(6,236) (6,236) (24,944)

(20,000) (20,000) (70,000)
(26,236) (26,236) (94,944)

(10,137) (8,487) (82,768)

19,356 9,220
9,220 732 732

coffee.com.au/bulk-16kg-green-beans/
ds.com.au/product-category/green-beans-coffee/
com.au/product-category/green-coffee-beans/
Higher price may reduce demand. Advertising will lead to growth in last two quarters
Price increase effective 1 July 2022.

Price of green coffee beans is expected to continue rising.

CPI increase
CPI increase & the new bagging machine will reduce labour usage.
CPI increase

CPI increase

CPI increase
CPI increase
CPI increase
CPI increase

CPI increase

CPI increase

sales volume X average selling price

sales volume X variable cost

operating profit before tax X income tax rate

Coffee Cube Pty Ltd
Operating Budget
Quarter ending 30 Jun 2022 30 Sep 2022 31 Dec 2022

Sales Budget
Sales volume (kg) 6,250 6,250 6,250
Selling price ($/kg) 42.00 42.00 42.00

Cost Budget
variable costs ($/kg roasted coffee sold)
green coffee 17.50 18.38 19.29
pakaging 0.95 0.95 0.95
labour 3.05 3.05 1.83
overheads 0.50 0.50 0.50
22.00 22.88 22.57

contribution margin ($/kg) 20.00 19.13 19.43

fixed costs ($)

wages (fixed part) 57,000 57,000 57,000
rent 16,000 16,000 16,000
insurance 2,800 2,800 2,800
utilities 4,000 4,000 4,000
repair & maintenance 1,500 1,500 1,500
logisitics (fixed part) 2,000 2,000 2,000
advertising 2,400 4,800 4,800
information technology 3,000 3,000 3,000
depreciation and amortisation 15,000 15,000 17,000
miscellaneous costs 1,295 1,295 1,295
104,995 107,395 109,395

Profit Budget
Sales revenue 262,500 262,500 262,500
LESS variable costs (137,500) (142,969) (141,086)
Contribution margin 125,000 119,531 121,414
LESS fixed cost (104,995) (107,395) (109,395)
Operating profit before tax 20,005 12,136 12,019
LESS income tax (4,001) (2,427) (2,404)
Operating profit after tax 16,004 9,709 9,615

Data for cash budget

cash received from customers
from prior quarter sales 30% 78,750 78,750
from current quarter sales 70% 183,750 183,750
Cash paid to employees
labour (variable) (19,063) (19,063) (11,437)
wages (fixed part) (57,000) (57,000) (57,000)
Non-cash costs
depreciation and amortisation (15,000) (15,000) (17,000)

Other costs (trade suppliers) (151,433) (159,301) (165,043)

payment to suppliers
for prior quarter costs 15% (22,715) (23,895)
 for current quarter costs 85% (135,406) (140,287)

Cash budget
Cashflow from operating activities
cash received from customers 262,500 262,500
cash paid to suppliers (158,121) (164,182)
cash paid to employees (76,063) (68,438)
cash paid to tax office (4,001) (2,427)
net cashflow from operating activities 24,316 27,453
Cashflow from investing activities
acquisition of bagging machine (8,000) (72,000)

net cashflow from investing activities (8,000) (72,000)

Cashflow from financing activities
payment to lenders (interest) (6,236) (6,236)
payments to owners (dividends) (20,000) (10,000)
net cashflow from financing activities (26,236) (16,236)

Net cash flow (9,920) (60,783)

cash at bank at beginning of quarter 83,500 73,580
cash at bank at end of quarter 83,500 73,580 12,797

Parameters
income tax rate 20%
CPI increase 6%

current cost of green beans ($/kg) 18.75 https://www.sopranocoffee.com.au/bulk-16kg-gree

20.00 https://ministrygrounds.com.au/product-category/g
17.00 https://rebelroasters.com.au/product-category/gre
 Fill-in the cells shaded green.
31 Mar 2023 30 Jun 2023 year ending
30-Jun-23

6,250 6,250 25,000

42.00 42.00

20.26 21.27
1.01 1.01
1.94 1.94
0.53 0.53
23.74 24.75

18.26 17.25

60,420 60,420 234,840

16,000 16,000 64,000
2,968 2,968 11,536
4,240 4,240 16,480
1,590 1,590 6,180
2,120 2,120 8,240
5,088 5,088 19,776
3,180 3,180 12,360
17,000 17,000 66,000
1,373 1,373 5,335
113,979 113,979 444,747

262,500 262,500 1,050,000

(148,345) (154,676) (587,076)
114,155 107,824 462,924
(113,979) (113,979) (444,747)
176 (6,155) 18,177
(35) 1,231 (3,635)
141 (4,924) 14,541

78,750 78,750
183,750 183,750

(12,124) (12,124)
(60,420) (60,420)

(17,000) (17,000)

(172,780) (179,111)

(24,757) (25,917)
 (146,863) (152,244)

262,500 262,500 1,050,000

(171,620) (178,161) (672,084)
(72,544) (72,544) (289,588)
(2,404) (35) (8,867)
15,933 11,760 79,461

0 0 (80,000)

0 0 (80,000)

(6,236) (6,236) (24,944)

(20,000) (20,000) (70,000)
(26,236) (26,236) (94,944)

(10,303) (14,476) (95,483)

12,797 2,493
2,493 (11,983) (11,983)

coffee.com.au/bulk-16kg-green-beans/
ds.com.au/product-category/green-beans-coffee/
com.au/product-category/green-coffee-beans/
Higher price may reduce demand. Advertising will lead to growth in last two quarters
Price increase effective 1 July 2022.

Price of green coffee beans is expected to continue rising.

CPI increase
CPI increase & the new bagging machine will reduce labour usage.
CPI increase

CPI increase

CPI increase
CPI increase
CPI increase
CPI increase

CPI increase

CPI increase

sales volume X average selling price

sales volume X variable cost

operating profit before tax X income tax rate