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