Accounting for decision making

Submit to: Dr. Danish Godil

Sukaina Salman - 27646

Submission date: 3rd May 2024, Friday
Table of Contents
1. Flavor Fusion – About the Product...................................................................................................2
1.1. Vision............................................................................................................................................4
1.2. Mission.........................................................................................................................................4
2. Analysis............................................................................................................................................4
2.1. 3 C’s.........................................................................................................................................4
2.2. SWOT analysis.........................................................................................................................5
2.3. 4P’s...........................................................................................................................................6
3. Goals.................................................................................................................................................8
3.1. Short-term Goals......................................................................................................................8
3.2. Long-term Goals......................................................................................................................8
4. Manufacturing Processes................................................................................................................12
4.1. Ingredient Preparation............................................................................................................12
4.2. Shell Preparation....................................................................................................................12
4.3. Moulding................................................................................................................................12
4.4. Filling.....................................................................................................................................12
4.5. Sealing....................................................................................................................................13
4.6. Packaging...............................................................................................................................13
4.7. Quality Control:.....................................................................................................................13
5. Google survey Analysis..................................................................................................................14
5.1. Demographics........................................................................................................................14
5.2. Consumption of flavoured beverages and foods....................................................................14
5.3. Awareness about edible flavored pods...................................................................................14
5.4. Factors impacting the purchase of edible flavor pods............................................................15
5.5. Consumer willingness to purchase edible flavor pods...........................................................15
5.6. Flavor preference...................................................................................................................15
5.7. Edible Flavor pods – Either a new concept or Not?..............................................................16
5.8. Recommendation...................................................................................................................16
5.9. Pricing....................................................................................................................................16
5.10. Distribution channel...............................................................................................................16
6. Costing............................................................................................................................................18
6.1. Direct Material costing...........................................................................................................18
6.2. Equipment cost.......................................................................................................................18
6.3. Electricity Billing...................................................................................................................19

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 6.4. Machine depreciation.............................................................................................................19
6.5. Water Biling...........................................................................................................................19
6.6. Salaries...................................................................................................................................19
6.7. Factory overhead....................................................................................................................20
6.8. Material costing for 10,000 Units..........................................................................................20
6.9. Job Costing.............................................................................................................................21
6.10. Breakeven...............................................................................................................................22
6.11. Production Budget..................................................................................................................22
6.13. Purchase Budget.....................................................................................................................23
6.14. Sales Budget...........................................................................................................................23
6.15. Income Statement...................................................................................................................23

1. Flavor Fusion – About the Product

Imagine this: you're whipping up dinner after a long day. You're tired, maybe a little hangry, and
the idea of digging through a cabinet full of spices to find exactly what you need sounds like
torture. But what if there was a better way?
In a world where food and beverage experiences are continually evolving, we are thrilled to
introduce a game-changing idea to the market: Edible Flavor Pods. With a keen eye on the
increasing demand for customizable and convenient flavor options, our company has developed
an innovative product poised to transform how people enjoy their culinary creations.
Edible Flavour Pods are small capsules filled with concentrated, natural flavourings carefully
selected to enhance the taste of a wide range of foods and drinks. Whether it's adding a burst of
flavour to your morning coffee or elevating a simple dish to gourmet status, these pods offer
endless possibilities for both novice cooks and seasoned chefs.
Our Edible Flavour Pods are designed to be user-friendly and environmentally sustainable,
offering a hassle-free way for consumers to experiment with different flavour combinations
without the need for extensive ingredient sourcing or storage. Each pod is precisely measured to
ensure consistent taste, making them perfect for use in home kitchens or professional settings.
Just pop one in your simmering soup, stir-fry, or pasta dish. As it heats up, the pod dissolves,
releasing its flavour magic without leaving any nasty bits floating around.

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And the best part? They're super versatile. Need a quick flavour boost for your oatmeal? Toss in
a blueberry and chia pod. Feeling adventurous with dinner? A single Thai curry pod can instantly
transform your dish. From classic comfort food to gourmet creations, these little flavour bombs
can take your cooking anywhere you want to go.
In the pages that follow, we will delve into the details of our product, including its financial
viability, procurement processes, raw material sourcing, and the necessary infrastructure, such as
manufacturing plants and machinery, needed to make Edible Flavour Pods a reality. Join us as
we explore the exciting potential of Edible Flavour Pods in the ever-evolving world of culinary
exploration.

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 1.1. Vision
We dream of changing how people taste food. We want to inspire everyone to try new Flavors
and make every meal more exciting. Our goal is for Edible Flavour Pods to help people enjoy
cooking and eating in a whole new way.

1.2. Mission
Our mission is to make tasty and eco-friendly flavour options that make food and drinks better
for everyone. We work hard to create top-notch products that surprise and delight taste buds. We
want to team up with others, build a culture of quality, and make a positive difference in the
world of food, one flavour pod at a time.

2. Analysis
2.1. 3 C’s
1. Company
The company behind Edible Flavour Pods is equipped with several strengths that position it
well in the market. Firstly, its innovative concept of flavour-enhancing pods offers a unique
solution to the growing demand for customizable culinary experiences. Additionally, the
company's commitment to sustainability, using natural ingredients and eco-friendly
packaging, appeals to consumers increasingly concerned about environmental issues.
However, the company faces challenges, including limited brand awareness and the need to
establish efficient distribution channels. Investment in marketing and education initiatives
will be crucial to overcoming these weaknesses and leveraging opportunities for growth,
such as expanding market reach and diversifying product offerings. External threats such as
competitive pressures and regulatory compliance issues must also be carefully managed to
ensure the company's long-term success.
2. Customers
Understanding the needs and preferences of customers is essential for the success of Edible
Flavour Pods. Target customers are seeking convenient and customizable flavour options to
enhance their culinary experiences. Demographic analysis reveals a diverse audience,
ranging from busy individuals looking for quick and easy solutions to cooking enthusiasts
seeking to experiment with new Flavors. By studying consumer buying behaviour and

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 soliciting feedback, the company can tailor its marketing efforts and product development
strategies to better meet customer expectations. Building brand loyalty through exceptional
product quality and responsive customer service will be key to maintaining customer
satisfaction and driving repeat purchases.
3. Competitors
In a crowded market landscape, Edible Flavour Pods must carefully assess its competitors to
carve out a distinct position. Analysing the strengths and weaknesses of existing flavour
enhancement products reveals opportunities for differentiation. The company's unique selling
proposition, including its innovative pod format, diverse flavour varieties, and sustainability
initiatives, sets it apart from traditional competitors. Pricing strategies must be carefully
calibrated to remain competitive while ensuring profitability. By monitoring competitors'
marketing tactics and promotional activities, the company can identify opportunities to
strengthen its brand presence, capture market share, and maintain a competitive edge in the
evolving culinary market.

2.2.SWOT analysis
Strengths Weaknesses
- Innovative Concept: Edible Flavour Pods - Limited Awareness: As a new product,
offer a unique and convenient way to Edible Flavour Pods may face challenges
enhance the taste of food and beverages, in building brand recognition and
setting them apart from traditional educating consumers about their benefits.
flavouring products. - Distribution Channels: Establishing
- Versatility: The pods can be used in a efficient distribution channels to reach
wide range of culinary applications, target markets may require significant
appealing to both home cooks and investment and strategic partnerships.
professional chefs. - Taste Preferences: Individual taste
- Sustainability Focus: With a commitment preferences vary widely, posing a
to using natural ingredients and eco- challenge in creating Flavors that appeal
friendly packaging, Edible Flavour Pods to a diverse consumer base.
align with consumer preferences for
sustainable products.

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 Opportunities Threats
- Market Expansion: As consumer interest - Competitive Pressure: The market for
in flavour customization continues to flavour enhancement products is highly
grow, there is significant opportunity to competitive, with established players and
expand the market for Edible Flavour potential new entrants posing a threat to
Pods both domestically and market share.
internationally. - Regulatory Compliance: Compliance with
- Collaboration Opportunities: Partnering food safety and labelling regulations
with food and beverage companies, presents a challenge, requiring ongoing
culinary influencers, and retailers can help monitoring and investment in quality
increase brand visibility and drive product control measures.
adoption. - Economic Factors: Economic downturns
- Product Diversification: Introducing new or fluctuations in consumer spending
flavour options and product variations can habits could impact demand for
attract new customers and cater to discretionary food products like Edible
evolving consumer preferences. Flavour Pods.

2.3.4P’s
Product
This includes the range of Flavors offered by the flavour pods, their taste, texture, and the quality
of ingredients used. It's also about the packaging design and convenience features such as portion
size and ease of consumption. For edible flavour pods, the product needs to be appealing,
flavourful, and satisfying to consumers' taste preferences.
Price
Pricing for edible flavour pods will depend on factors such as the cost of ingredients, production,
packaging, and the perceived value of the product. Pricing should be competitive within the
market while also reflecting the quality and uniqueness of the Flavors offered. Special pricing
strategies, such as introductory discounts or bulk purchase incentives, may also be considered to
attract customers.
Place

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Place refers to where consumers can purchase the edible flavour pods. Distribution channels may
include grocery stores, convenience stores, specialty food shops, online retailers, or direct-to-
consumer sales. The goal is to make the product available in locations where consumers typically
shop for snacks or specialty foods, ensuring easy access and visibility.
Promotion
Promotion involves marketing efforts to create awareness and generate interest in the edible
flavour pods. This may include advertising campaigns highlighting the variety of Flavors, their
delicious taste, and the convenience of the product. Promotion can also involve social media
marketing, influencer partnerships, product sampling events, and other promotional activities to
engage with consumers and encourage trial and purchase.

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3. Goals
3.1.Short-term Goals
1. Market Penetration: Our immediate focus is on making Edible Flavour Pods readily
available to consumers. This means securing agreements with key retailers and online
platforms so that customers can easily find and purchase our products wherever they
shop.
1. Brand Awareness: Building recognition for Edible Flavour Pods is crucial for
our success. We plan to launch targeted marketing campaigns that highlight
the benefits and versatility of our product. Through advertising, social media
engagement, and other promotional efforts, we aim to educate consumers
about how Edible Flavour Pods can enhance their culinary experiences.
2. Product Development: We're committed to continually improving and
expanding our product offerings. By introducing new flavour varieties and
innovative product features based on customer feedback and market trends,
we'll keep our product lineup fresh and appealing to a wide range of tastes.
3. Customer Engagement: Listening to our customers is essential for building a
loyal following. We'll establish channels for gathering feedback and reviews,
such as surveys and social media platforms, to understand what our customers
love about Edible Flavour Pods and where we can make improvements.
4. Operational Efficiency: Ensuring that our manufacturing and distribution
processes run smoothly is essential for meeting customer demand and
maintaining product quality. We'll focus on streamlining our operations to
ensure that Edible Flavour Pods are consistently available to consumers while
optimizing costs to maximize profitability.

3.2.Long-term Goals
1. Market Expansion: While we're focused on our current target market, we have our
sights set on broader horizons. We aim to extend our reach beyond our current
demographics and geographic regions, capturing a larger share of the flavour
enhancement market both domestically and internationally.

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2. Sustainability Leadership: Our commitment to sustainability is a core value of our
company. In the long term, we aspire to become a leader in sustainable flavour
products. This means sourcing eco-friendly ingredients, implementing
environmentally responsible packaging solutions, and minimizing our environmental
footprint throughout the entire product lifecycle.
3. Innovation Leadership: Innovation is at the heart of everything we do. To stay ahead
of the competition and meet evolving consumer preferences, we'll continue to invest
in research and development efforts to drive product innovation. By pushing the
boundaries of what's possible, we'll ensure that Edible Flavour Pods remain at the
forefront of culinary innovation.
4. Global Presence: While we're starting small, our ultimate goal is to become a global
brand. We'll achieve this by expanding into international markets, leveraging strategic
partnerships and market insights to adapt our products and marketing strategies to
local preferences and regulations.
5. Community Impact: Making a positive impact on society is important to us. In the
long term, we'll look for opportunities to give back to the communities we serve.
Whether through charitable partnerships, community outreach programs, or
environmental initiatives, we'll strive to make a meaningful difference in the world
while staying true to our values.

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4. Marketing and Branding
Marketing and branding edible flavor pods involves creating a strategy that speaks directly to
consumers in a language they understand. It starts by pinpointing who exactly these flavor pods
are for—maybe it's the home cook looking for convenient ways to spice up meals, the health-
conscious individual seeking natural flavorings, or the culinary enthusiast eager to experiment
with new tastes. Once the target audience is identified, the next step is to define what makes
these flavor pods stand out. Is it their convenience, offering a shortcut to delicious flavors
without the hassle? Or perhaps it's their commitment to sustainability, using natural ingredients
and eco-friendly packaging? Whatever it is, it needs to be crystal clear and compelling.

With the foundation set, it's time to bring the brand to life. This means creating a visual identity
that reflects the essence of the product—a name that's catchy and memorable, a logo that's
instantly recognizable, and packaging that catches the eye and communicates the product's
benefits at a glance. The goal is to make sure that when consumers see those flavor pods on the
shelf or online, they immediately know what they're getting and why it's worth their attention.

But branding is about more than just looks—it's also about the stories we tell and the connections
we make. That's why content marketing plays a crucial role in building a brand around edible
flavor pods. Whether it's sharing recipe ideas, behind-the-scenes glimpses of the production
process, or user-generated content showcasing creative ways to use the product, the goal is to
engage and educate consumers, building trust and loyalty along the way.

Of course, no marketing strategy would be complete without getting the product into consumers'
hands. That means forging partnerships with retailers, both online and offline, to ensure that
edible flavor pods are readily available wherever consumers shop for their culinary needs.
Sampling events and product demonstrations can also be powerful tools for introducing
consumers to the product and letting them experience its benefits firsthand.

But perhaps most importantly, successful marketing and branding of edible flavor pods requires
a commitment to listening to consumers and continuously innovating to meet their needs.
Whether it's introducing new flavors, packaging formats, or marketing initiatives, the goal is to
stay ahead of the curve and keep consumers coming back for more. By understanding who their

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audience is, what sets their product apart, and how to connect with consumers in meaningful
ways, companies can build a brand that not only sells flavor pods but becomes synonymous with
delicious, convenient, and sustainable culinary experiences.

5. Some othe the SKU’s are following:

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6. Manufacturing Processes
6.1.Ingredient Preparation
Gather all the necessary ingredients for both the edible shell and the flavour filling. This
includes gelatine or agar-agar, pectin, flavourings, coloring agents, sweeteners, and any
other additives.
Measure and weigh the ingredients according to the recipe formulation.

6.2.Shell Preparation
In a large mixing vessel, combine water, gelatine or agar-agar, pectin, and any other
ingredients needed for the shell.
Heat the mixture over low to medium heat, stirring continuously until all ingredients are
completely dissolved and the mixture becomes smooth and homogeneous.
Optionally, add colouring agents or flavourings to the shell mixture and mix thoroughly
to distribute evenly.

6.3.Moulding
Pour the prepared shell mixture into individual Molds designed to create the desired
shape and size for the flavour pods. Ensure that the Molds are clean and free from any
contaminants.
Allow the mixture to cool and set in the Molds at room temperature or transfer them to a
refrigeration unit to accelerate the setting process.

6.4.Filling
Once the edible shells have set and are firm to the touch, remove them from the Molds
carefully.
Fill each shell with the desired flavour filling using specialized equipment. The filling
may consist of liquid, gel, powder, or other forms depending on the desired texture and
consistency.
Ensure that each shell is filled evenly and completely, leaving no air pockets or gaps.

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6.5.Sealing
Seal the filled flavour pods to encase the filling securely within the edible shell. This
may involve heat-sealing, crimping, or other sealing methods depending on the type of
packaging used.
Check each pod for proper sealing and integrity to prevent leakage or spoilage.

6.6.Packaging
Package the sealed flavour pods into consumer-friendly containers such as boxes,
pouches, or trays. Ensure that the packaging is clean, sturdy, and properly labelled with
relevant information such as flavour variety, ingredients, and expiration date.
Consider additional protective measures such as individual wrapping or
compartmentalized packaging to maintain freshness and prevent flavour cross-
contamination.

6.7.Quality Control:
Conduct quality control checks throughout the manufacturing process to ensure product
consistency, safety, and compliance with regulatory standards.
Inspect the appearance, texture, flavour, and aroma of the flavour pods to identify any
defects or deviations from quality specifications.
Address any issues promptly and implement corrective actions to maintain product
quality and customer satisfaction.

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7. Google survey Analysis
Edible flavour pods conducted a survey to understand what people think about their product idea.
They wanted to know if people are interested in trying flavoured pods that you can eat, like little
capsules filled with flavour. The survey asked questions to find out if this idea is unique, if
people would buy it, and how much they might be willing to pay for it. By getting feedback from
the survey, they can decide if it's a good idea to make and sell these flavoured pods.

7.1.Demographics
The survey was conducted by 67% females and 33% males. Also, it was evident that survey was
majorly conducted by people ranging 24 – 29 years old that accounted for 70 %. 25% were from
18-23 years old and remaining were above 33 years old. Moreover, 85% people reside in
Karachi, whereas 7 % people reside in Faisalabad and remaining in Islamabad.

7.2.Consumption of flavoured beverages and foods

The response over the consumption of flavoured beverages and foods gain insights into the level
of interest or familiarity respondents have with flavored products. There was not a single
response for no consumption of flavored food, indicating that people incline towards flavor. 46%
of respondents consume flavored products weekly, which means a large portion of respondents
indicate that they consume flavored beverages or food products frequently, it suggests a potential
market for edible flavor pods, as there is already existing demand for flavored items. 13%
respondents prove to consume flavored products daily and 33% respondent to occasional
consumption of food. This shows that people are interested in exploring different flavored foods.

7.3.Awareness about edible flavored pods

This help in understanding the awareness level about the specific product. After conducting the
survey, it was evident from it that 64% people were not aware of this product. This means that
this product is a new invention in Pakistan’s market as more than half of the respondents were
clueless about the product. It suggests that they are not familiar with edible flavor pods,
indicating that the concept may be relatively new or unfamiliar to them.

7.4.Factors impacting the purchase of edible flavor pods

Factors such as convenience, customization, health benefits, novelty and sustainability helps us
understand the aspects of the product concept resonate most with potential customers. By

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allowing respondents to select multiple benefits, the surveyor can identify the key selling points
of edible flavor pods according to the preferences of the target audience. After looking at the
response, it is seen that respondents were incline more towards customization which mean that
they are looking over the variety of flavors. Other than this, convenience and health benefits rand
second which means that after flavors, customers tends to look over its convenience and healthy
benefits. Sustainability and novelty is last to be considered by the respondents when they
consume edible flavor pods. this question helps prioritize the most attractive features of edible
flavor pods from the perspective of potential customers, informing product development,
marketing messaging, and overall strategy.

7.5.Consumer willingness to purchase edible flavor pods

Over 50% respondents were somewhat likely to purchase edible flavor pods, meaning While
they may not be as enthusiastic as those who selected "Very likely," they still show a willingness
to consider buying the product. Moreover, for not very likely and not at al likely, there were 0
respondent which indicates that respondents are showing positive interest in consuming edible
flavor pods.

7.6.Flavor preference.

By analyzing the responses, we tend to identify popular flavour preferences among respondents,
which can inform decisions related to product development, flavour offerings, and marketing
strategies. About 80% respondents were interested in fruity flavours like strawberry, mango. 60^
respondents were towards citrus flavours, including lemon, lime. Minty Flavors like peppermint,
spearmint is the preference of 33% people. Deserty Flavors like chocolate vannila is preferred by
26 % of the respondents. This enables us to forecast the demand according to the flovors.

7.7.Edible Flavor pods – Either a new concept or Not?

After conducting survey, it was evident that respondents thing that this product is a new product
which is evident by 50% responses on somewhat like response. This option is chosen by
respondents who believe that edible flavor pods have some degree of uniqueness, but perhaps not
to the extent of being extremely novel. They see potential for differentiation but may also
recognize similarities with other products.

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 7.8.Recommendation

65% respondents saw the scope in the new intervention of the product in the market. 65%
respondents were inclines into very likely recommendation, indicating a strong intention to
recommend edible flavor pods to others. They perceive the product positively and are highly
likely to share their positive experience with friends and family. The rest of respondents showed
somewhat likely recommendation. Meaning While they may not be as enthusiastic as those who
selected "Very likely," they still see value in recommending the product to others.

7.9.Pricing

It is evident after the survey that consumers are ok if the prices are high for this convenient
product. Over 40% respondents were in favor of price range of PKR 1000-1500 for a pack of 10
edible pods. 46% respondents looked over the price range of PKR 500 – 1000 the remaining
13% respondents were fine with price range of PKR 1500 – 2000. This means that people are
willing to pay good amount to enhave their food experience.

7.10. Distribution channel

Out of three option which were grocery stores, online and convenience stores, 80% respondents
select "Grocery store" as their preferred purchasing location for edible flavor pods, it indicates
that they would like to buy the product from traditional brick-and-mortar grocery stores.

This preference suggests that respondents view grocery stores as convenient and accessible
locations for purchasing food and beverage products, including innovative items like edible
flavor pods.

For the business behind the edible flavor pods, this information can be valuable for determining
distribution strategies. It may indicate the importance of securing partnerships with grocery store
chains or ensuring that the product is available in the grocery aisles where consumers typically
shop for similar items. Additionally, it suggests the need to consider factors such as packaging,
shelf placement, and marketing efforts tailored to the grocery store environment.

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8. Costing
8.1.Direct Material costing
Direct Material Costing
Quantity Re quire d
Quantity Re quire d for
Market Price Unit price for Price for 10 pods
50 pods
10 pods

Flavoring PKR 3,000 for 500 grams 6 15 grams 1.5 9

Edible shell
Gelatine PKR 360 for 500 grams 0.72 30 gram 3 2.16
Pectine powde r PKR 395 for 50 grams 7.9 15 gram 1.5 11.85
Corn Syrup PKR 390 for 500 ml 0.78 400 gram 40 31.2

Packaging 25 pieces for PKR 1700 68 68 68

500 labels for PKR 600 1.2 1.2 1.2

Water required 1.5 litres 0.15 0.0317

Total direct material cost 123.4417

8.2. Equipment cost

Proce sses Machines with Capacity Estimate d Cost (PKR) Estimate d power (Kw)
Thermometer PKR 65,000
Mixing tank with heater 0.3 Million PKR 11
Direct Mixing and heating
Weighing scales PKR 34,000 -

Basic conveyer belts PKR 55,000 PKR 3

Moulding Cavity Silicon Tray PKR 15,700 -
Filling machines 3.8 Million PKR 4

Cooling Commercial and industrial cooling chillers 0.15 Million PKR 9

Demoulding Labor required -

Texture analyzer PKR 82,500 PKR 2

microbial enumeration kits or
Quality control 0.114 Million PKR 3
ATP bioluminescence analyzers
Weighing scales PKR 34,000 -

Basic conveyer belt PKR 55,000 PKR 3

Packaging and se aling Packing machines 0.45 Million PKR 4
Labeling equipment 0.1 Million PKR 2

Total equipment Cost PKR 1,390,200 PKR 40

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 K.E Bill Calculation
Total power Consumption on machine 40 KW
Machine running Hour/ day 8 Hrs
Daily Power Consumption 322 KWR
Month Days 20 Sat/Sun Off
Lighting And other Appliances 355 KW
Total 6803 KWR
Per Unit Rate 47 K-electric rate
Bill PKR 319,741 Rs

8.3.Electricity Billing

Machine De preciation
Machine Price in PKR PKR 1,390,200
Life (years) 10
Salvage Value - 10% PKR 139,020
Yearly Depre ciation PKR 125,118
Monthly De preciation PKR 10,427

8.4.Machine depreciation
Water Bill
Proce ss Consumption (Gallons) 1500
Others (Gallons) 3000
Total consumption (Gallons) 4500
KWSB Industrial Rate (per 1000 Gallons) PKR 800
Total Water bill PKR 3,600

8.5. Water Biling

8.6. Salaries
Department Staff Req Per person salary Total
Mixing & Measuring 1 PKR 35,000 PKR 35,000
Cleaning 1 PKR 35,000 PKR 35,000
Quality 2 PKR 50,000 PKR 100,000
Manager 1 PKR 200,000 PKR 200,000
Total Salaries PKR 370,000
Department Staff Re q Per person salary Total
Mixing & Measuring 1 PKR 45,000 PKR 45,000
Cleaning 1 PKR 35,000 PKR 35,000
Quality 2 PKR 50,000 PKR 100,000
Manager 1 PKR 200,000 PKR 200,000
Total Salaries PKR 380,000

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 8.7. Factory overhead

FOH Calculation
Electricity Bill PKR 319,741
Water Bill PKR 3,600
Executive Salarie s PKR 200,000
Store and Supplies PKR 20,500
Depreciation PKR 10,427
Maintenance Costs PKR 20,000
Re nt PKR 120,000
Insurance expense PKR 5,793
Total FOH PKR 700,060

8.8.Material costing for 10,000 Units

Working for individual ingredient cost (10,000 pouches)
Material Required Cost per pouch (10 Pods) Total cost
Flavoring PKR 90 PKR 900,000
Gelatine PKR 22 PKR 216,000
Pectine powder PKR 119 PKR 1,185,000
corn Syrup PKR 312 PKR 3,120,000
Water 0.15 PKR 1,500
Packaging
Foil Pouches PKR 68 PKR 680,000
Labels PKR 1.20 PKR 12,000
Total Direct Material for 10,000
PKR 611 PKR 6,114,500
pouches,

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8.9.Job Costing
JOB COSTING
Purchases for Month
Material Required
Flavoring PKR 900,000
Gelatine PKR 216,000
Pectine powder PKR 1,185,000
corn Syrup PKR 3,120,000
Water PKR 1,500
Packaging
Foil Pouches PKR 680,000
Labels PKR 12,000
Total Purchases PKR 6,114,500
R.M(beg) ADD PKR 0
Purchases return PKR 0
Purchases discount PKR 0
R.M (End) LESS PKR 6,114,500
DM PKR 6,114,500
DL PKR 170,000
FOH PKR 700,060
TMC PKR 6,984,560
W/P (Beg) ADD PKR 0
W/P (End) Less PKR 0
COGM PKR 6,984,560
F/G (Beg) ADD PKR 0
F/G (End) Less(Assuming 2.5%) PKR 500,000
COGS PKR 6,484,560

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8.10. Breakeven
Fixed Costs
Loan Payment (1.5 Years Plan) PKR 55,556
Interest Payment (23% PA) PKR 19,167
Machine Depreciation PKR 10,427
Plant Depreciation -
Salaries PKR 380,000
Supplies PKR 20,500
Electricity PKR 319,741
Marketing + Administration PKR 355,000
Rent and Insurance PKR 125,793
Total Fixed cost PKR 1,286,182
S.P PKR 750
Variable cost PKR 644
Contribution Margin PKR 106
Fixed Cost PKR 1,286,182
BEQ PKR 9,283

8.11. Production Budget

Production Budget
F/G (end) PKR 300,000
Sales (Assuming 80%) PKR 4,800,000
F/G (beg) PKR 0
Production PKR 5,100,000

8.12.

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 8.13. Purchase Budget
Purchase Budget
Product (Edible flavor pods) Flavoring Gelatine Pectine Powder Corn Syrup Foil pouches Labels
D/ M PKR 900,000 PKR 216,000 PKR 1,185,000 PKR 3,120,000 PKR 680,000 PKR 12,000
ADD R/ M E 0.00 0.00 0.00 0.00 0.00
LESS R/ M (B) 0.00 0.00 0.00 0.00 0.00
PURCHASES (RS) PKR 900,000 PKR 216,000 PKR 1,185,000 PKR 3,120,000 PKR 680,000 PKR 12,000

8.14. Sales Budget

Sales Budget
Product Edible Flavor Pods
Units PKR 10,000
Price PKR 1,000
Sales PKR 10,000,000

8.15. Income Statement

PROJECTED INCOME STATEMENT
SALE VALUE PKR 10,000,000
LESS COGS PKR 6,484,560
GROSS PROFIT PKR 3,515,440
LESS MKT AND ADM EXP -PKR 220,000
LESS INTREST PAYMENT PKR 55,556
INCOME BEFORE TAX PKR 3,350,996
INCOME TAX@ 35% PKR 1,172,848
NET INCOME PKR 2,178,147

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