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Case Study: A Votre Santé (AVS) wine shop

Submitted by-
Neeraj Jha 46 /2018

Submitted to- Deepali Nanda 47/2018

Nikhil Garg 48/2018

Dr. Vishakha Bansal Nimmagadda Karthik 49/2018

Himanshu Kapoor 50/2018

Vaibhav Agarwal 61/2018


Background

 A Votre Santé (AVS) is a small winery owned by Kay Aproveche.


 AVS buys the grapes at the point at which they have ripened on the
vine.
 It is responsible for harvesting the grapes and all further processing
of the grapes into wine.
 AVS bottles three wines: A Chardonnay-Estate, a regular
Chardonnay, and a Blanc de Blanc.
Response 1
Response 2
Loss of sale of blanc de blanc
Assumption3: New Chardonnay wine is different from Regular Chardonnay wine. That’s why we pay
5,000 extra to the Wine master to taste new wine.
Working notes: -
1) Calculation of total revenue
Sale Price of different product of A Votre Santé(AVS)
Product Sale Price (per bottle) Quantity produced Revenue
Chardonnay-Estate $22 24,000 bottles $3,28,000
Regular Chardonnay $16 9,000 bottles $144,000
Blanc de blanc $11 16,000 bottles $176,000
Total Revenue $8,48,000
Calculation of quantity produced
Chardonnay Grapes harvest – 100,000 pounds
After fermentation (Less 10%) – 90,000 pounds
Generic Grapes harvest – 60,000 pounds
After fermentation (Less 5%) – 57,000 pounds
1 bottle= 3 pounds
Chardonnay-Estate = 24000 bottles x 3 = 72,000 pounds
Regular Chardonnay = 18,000 pounds (90,000- 72,000) of Chardonnay
+ 9,000 pounds of Generic grapes wine
= 27,000/3
= 9,000 bottles
Blanc de blanc = 57,000 – 9,000
= 48,000/3
= 16,000 bottles
2) Bottle, labels, corks cost = $2.50 x 49,000 bottles
= $122,500

3) Indirect material per case = $1.55


1 case = 12 bottles
No. of case = 49,000 bottles/ 12
= 4083 cases
Indirect material cost = $1.55 x 4083 cases
= $6,329

4) Barrel cost = 63 x $75 = $4,725

1 barrel = 40cases x 12 bottles each x 3 pounds per bottle


= 1440 pounds (post fermentation)
Total no. of barrel = 90,000(post fermentation)/1440
= 63 (approx.)
Cost per Barrel/yr. = (Investment – Scrap value)/No. of years
= (500 – 200)/ 4 years
= $75
5) Revenue of new wine = $14 x 9,000 bottles
= $1,26,000
6)Generic grapes cost
7) Indirect material cost = $1.55 x 750 cases
= $1,162.5
1 case = 12 bottles
No. of case = 9,000 bottles/ 12
= 750 cases
8) Barrel cost = $75 x 13 barrel
= $975
1 barrel = 40cases x 12 bottles each x 3 pounds
per bottle
= 1440 pounds (post fermentation)
No. of Barrel = 18,000 pounds/1440 pounds
= 12.5 => 13 (Approx.)
Thank You

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