The document outlines the costs involved in producing a food product including raw materials, supplies, fixed assets, labor, and other expenses. Raw materials to produce seven servings total ₱123.06. Variable supply costs are ₱52 per day while fixed supply costs are ₱690 amortized over 260 days. Fixed assets total ₱5,600 amortized daily. Production costs are estimated at ₱22.73 per serving.
The document outlines the costs involved in producing a food product including raw materials, supplies, fixed assets, labor, and other expenses. Raw materials to produce seven servings total ₱123.06. Variable supply costs are ₱52 per day while fixed supply costs are ₱690 amortized over 260 days. Fixed assets total ₱5,600 amortized daily. Production costs are estimated at ₱22.73 per serving.
The document outlines the costs involved in producing a food product including raw materials, supplies, fixed assets, labor, and other expenses. Raw materials to produce seven servings total ₱123.06. Variable supply costs are ₱52 per day while fixed supply costs are ₱690 amortized over 260 days. Fixed assets total ₱5,600 amortized daily. Production costs are estimated at ₱22.73 per serving.
The document outlines the costs involved in producing a food product including raw materials, supplies, fixed assets, labor, and other expenses. Raw materials to produce seven servings total ₱123.06. Variable supply costs are ₱52 per day while fixed supply costs are ₱690 amortized over 260 days. Fixed assets total ₱5,600 amortized daily. Production costs are estimated at ₱22.73 per serving.
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3.
2 Production and Operations Cost
3.2.1 Cost of Raw Materials
The total cost of raw materials that we will be incurring for producing our product is ₱ 123.06 which can already produce seven (7) servings. The breakdown of this is shown below:
Materials Quantity Unit Cost Cost
Chocolate 120 grams ₱ 29.00 per 120 ₱ 29.00 Cookies grams Eggs 2 pieces ₱ 9.00 per piece 18.00 Fortified 170 mL ₱ 21.00 per pack with 21.00 Milk 170 mL content Water 500 mL ₱ 10.00 per 500 mL 10.00 Baking 10 grams ₱ 28.00 per 50 grams 5.00 Powder Brown 55 grams ₱ 23.00 per 250 5.06 Sugar grams Cupcake 7 pieces ₱ 5.00 per piece 35.00 Container Total Cost of Raw Materials ₱ 123.06 Cost per Serving ₱ 17.58
3.2.2 Cost of Materials and Supplies
The total cost of materials and supplies that we will be incurring for producing our product is classified into two, the variable cost and the fixed cost. Fixed costs are estimated to be used for 260 working days in a year (or 5 days in a week). Both costs and its allocation to the cost per serving is broken down with the details shown below: Supplies Quantity Unit Cost Cost Variable Cost of Materials and Supplies (a) Butane Gas 2 pieces per ₱ 26.00 per ₱ 52.00 day piece Fixed Cost of Materials and Supplies Steamer 1 unit 588.00 ₱ 588.00 Baking Cup 1 set 75.00 75.00 Stainless Steel Wire 1 unit 27.00 27.00 Whisk Total Fixed Cost of Materials and Supplies ₱ 690.00 Cost per Daily Use of Fixed Cost of Materials and ₱ 2.65 Supplies (Total Fixed Costs ÷ no. of working days in a year) (b) Total Cost per Daily Use (a + b) ₱ 54.65 Cost per Serving (Total Cost per Daily Use ÷ ₱ 1.82 Total Number of Daily Servings*)
*Estimated to be 30 servings a day.
3.2.3 Cost of Fixed Assets
The cost of fixed assets, including its respective daily depreciation rate, computed using a simple depreciation method, is shown below:
Fixed Assets Cost Daily Depreciation Rate*
Portable Butane ₱ 600.00 ₱ 0.29 Stove Food Stall ₱ 5,000.00 ₱ 3.85 *Can be computed by dividing the cost of fixed asset by its useful life and dividing the result further by 260 days, being the number of working days in a year.
3.2.4 Cost of Direct Labor
From preparation to packaging, our commitment and dedication contribute
significantly to the business operations without incurring external labor expenses.
3.2.5 Other Production and Operation-Related Cost
Other production and operation-related costs daily are reflected as follows:
Particulars Cost Cost Allocation per Serving
Printing Cost for ₱ 70.00 ₱ 2.33 Packaging (30 pcs.) Transportation ₱ 30.00 1.00 Total Cost per Serving ₱ 3.33
3.2.6 Production Cost Summary
With the abovementioned cost per serving, it can be summarized as
follows:
Particulars Cost per Serving
Cost of Raw Materials ₱ 17.58 Cost of Materials and Supplies 1.82 Other Production and Operation-Related Costs ₱ 3.33 TOTAL PRODUCTION COST PER SERVING ₱ 22.73 (take note, this ₱22.73 will be the cost that you will use in computing your price in your pricing strategy in Chapter 4)
3.2.7 Other Regulatory Expenses
For legality of our business, we will be complying with the minimum
regulatory requirement for setting up a business thus we expect to incur ₱200.00 for the barangay business permit.
