Question

Berry Bang Recipe (adapted from Thermomix’ “Boost Berry Bang”): Ingredients for a single serve of Berry Bang:

• 80 grams (g) frozen berry yoghurt

• 60 millilitres (ml) apple juice

• 50g frozen mixed berries

• 8g Yellow Box honey

• 100g crushed ice

• 1 plastic cup

• 1 straw with scoop end

Add all ingredients into the blending machine. Place the lid on the machine. Blend the ingredients for 15 seconds on a low speed. Mix again for 9 seconds on high speed. A spatula and a measuring cup is required. Use the spatula and measuring cup to decant the volume equivalent of up to 400ml into the serving cup. Add the straw and serve.

Wholesale prices for the Berry Bang ingredients

Ingredient	Wholesale Price
yoghurt	frozen yoghurt strawberry, mango and wildberry 1.416 kilogram (kg) = $13.50
apple juice	apple juice 6 x 2 litres (l) = $26.69
mixed berries	frozen mixed berries (strawberries, raspberries, blueberries, blackberries, redcurrants, blackcurrants and sour cherries) 1 kilogram = $7.65
honey	Yellow box honey 1 kilogram bucket = $38.25
ice	5 kilogram bag of ice = $2.50
plastic cup	500 millilitre plastic PET cup: 1,000 per carton: $220.03 per carton => $0.220 per cup
straw	plastic drinking spoon straws with scoop end: 6,000 per carton: $101.66 per carton => $0.017 per piece

Based on the Berry Bang recipe, above, and the wholesale prices quoted for the ingredients, estimate the unit cost of a Berry Bang smoothie (include the cost of one cup and one straw).

Ingredient	1 serve	Amount	Per	Wholesale Price	Price per Unit
yoghurt	80g	0.080	kg	$9.53	$0.76
apple juice	60 ml	0.060	ltr	$2.22	$0.13
mixed berries	50 g	0.050	kg	$7.65	$0.38
honey	8 g	0.008	kg	$38.25	$0.31
ice	100 g	0.100	kg	$0.50	$0.05
plastic cup	1	1	1	$0.22	$0.22
straw	1	1	1	$0.017	$0.02
Total Costs per Unit					$1.87

Answer the following question:

Based on your team’s analysis as presented in your Group Presentation and as you have personally revised in light of the feedback you received on that presentation, how many Berry Bang serves do you estimate the franchise would need to sell each week in order to earn a profit or return on capital invested ($300,000 in plant and equipment) equal to 20%.

The Selling price of serve is not given. you need to assume that price and calculate the profit as required.

Answer 1

Assuming Sales Price =$ 2 per unit and 52 weeks in the year and selling quantity be y unit

Variable cost per unit =1.87

Sales(Selling Price * quantity) = Cost ( Cost per unit* quantity) + Profit

2y = 1.87y + (300000*20%)

.13y=60000

Selling units(y) = 461539 unit (approx)

Selling quantity per week = 461539/52

=8876 unit per week.

Note - Plant and equipment is subject to depreciation however as it is a non cash item therefore not cosnidered for costing purpose.