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|Combrands, Inc. |
|Combrands, Inc. is engaged in manufacturing, selling and exporting the famous |
|Chicharritos brand of chicharron. It started its business operation in 2008 when it acquired |
|the business and the brand Chicharritos from Alenter Foods, Inc. Today, its chicharron |
|products are being developed in varieties of flavors and from different base materials |
|starting with the traditional pork skin, chicken, tuna fish and eventually from non-traditional |
|materials like seaweeds, vegetables and others. Combrands, Inc. produces its chicharron |
|products in a newly built, GMP and HACCP certified manufacturing plant located at |
|Tabok, Mandaue City, Cebu. |
| |
|CBI sells also other products like island dried fruits, fruit bars and fruit mixes that are |
|produced by the sister company Orient Foods Industries Corporation (OFIC). A lot of |
|synergies have been identified between the two companies and a merging is likely to |
|happen in 2011. Orient Foods has been in operation for the past 25 years producing and |
|exporting dried mango, papaya and pineapple and has been considered as one of the respected |
|pioneers in fruit dehydration. Orient Foods has its plant at Sibulan, Negros Oriental |
|and manufacture its product with authenticity to preserve the most natural taste, |
|aroma and texture. |
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|[pic] |
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|Combrands, Inc. |
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|Chicharritos Production |
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|Unit Process Cost - Over-All |
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|Pork Chicharron Pellets |
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|October 2012 |
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|Particulars |
|Qty. |
|Unit |
|Unit Cost |
|Amount |
| |
|A. |
|Cleaning & Slicing Area |
| |
| |
| |
| |
| |
| |
| |
|A.1 |
|Pork Back Skin Input (Ahlborn) |
|1,000.00 |
|kilo |
|75.00 |
|75,000.00 |
| |
| |
| |
|Electricity |
|22.66 |
|kW |
|10.00 |
|226.60 |
| |
| |
| |
|LPG |
|- |
|kilo |
|68.52 |
|- |
| |
| |
| |
|Water |
|0.50 |
|cu. m. |
|44.00 |
|22.00 |
| |
| |
| |
|Palm Oil |
|- |
|kilo |
|59.82 |
|- |
| |
| |
| |
|Labor Cost (Production Associate) |
|20.00 |
|man-hr |
|38.13 |
|762.60 |
| |
| |
| |
|(Production Associate) |
|- |
|man-hr |
|38.13 |
|- |
| |
| |
| |
|Raw Material Output |
|990.00 |
|kilo |
|76.78 |
|76,011.20 |
| |
| |
| |
|less Return |
|10.00 |
|kilo |
|- |
|- |
| |
| |
| |
|Recovery |
|990.00 |
|kilo |
|76.78 |
|76,011.20 |
| |
| |
|A.2 |
|Slicing |
|99.00% |
| |
| |
| |
| |
| |
| |
|Pork Back Skin Input |
|990.00 |
|kilo |
|76.78 |
|76,011.20 |
| |
| |
| |
|Electricity |
|45.32 |
|kW |
|10.00 |
|453.20 |
| |
| |
| |
|LPG |
|- |
|kilo |
|68.52 |
|- |
| |
| |
| |
|Water |
|0.50 |
|cu. m. |
|44.00 |
|22.00 |
| |
| |
| |
|Palm Oil |
|- |
|kilo |
|59.82 |
|- |
| |
| |
| |
|Labor Cost (Section Head) |
|10.00 |
|man-hr |
|39.47 |
|394.70 |
| |
| |
| |
|(Production Associate - 2 pax) |
|20.00 |
|man-hr |
|38.13 |
|762.60 |
| |
| |
| |
|Raw Material Output |
|960.30 |
|kilo |
|80.85 |
|77,643.70 |
| |
| |
| |
|less Saw Dust |
|29.70 |
|kilo |
|- |
|- |
| |
| |
| |
|Recovery |
|960.30 |
|kilo |
|80.85 |
|77,643.70 |
| |
|B. |
|Pelleting Area |
| |
|97.00% |
| |
| |
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|B.1 |
|Blanching |
| |
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|Pork Back Skin Input |
|960.30 |
|kilo |
|80.85 |
|77,643.70 |
| |
| |
| |
|MSG |
|4.40 |
|kilo |
|118.00 |
|519.36 |
| |
| |
| |
|Iodized Salt |
|8.80 |
|kilo |
|8.80 |
|77.46 |
| |
| |
| |
|Electricity |
|61.87 |
|kW |
|10.00 |
|618.70 |
| |
| |
| |
|LPG |
|23.44 |
|kilo |
|68.52 |
|1,606.09 |
| |
| |
| |
|Water |
|1.00 |
|cu. m. |
|44.00 |
|44.00 |
| |
| |
| |
|Recovered Lard |
|34.00 |
|kilo |
|- |
|- |
| |
| |
| |
|Labor Cost (Section Head) |
|- |
|man-hr |
|39.47 |
|- |
| |
| |
| |
|(Production Associate) |
|11.00 |
|man-hr |
|38.13 |
|419.43 |
| |
| |
| |
|Raw Material Output (94%) |
|902.68 |
|kilo |
|89.65 |
|80,928.75 |
| |
| |
| |
|less Shrinkage & Saw Dust (5%) |
|48.02 |
|kilo |
|- |
|- |
| |
| |
| |
|less Pork Lard (1%) |
|9.60 |
|kilo |
|- |
|- |
| |
| |
| |
|Recovery |
|902.68 |
|kilo |
|89.65 |
|80,928.75 |
| |
| |
|B.2 |
|Deep Frying |
| |
| |
| |
| |
| |
| |
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|Pork Back Skin Input |
|902.68 |
|kilo |
|89.65 |
|80,928.75 |
| |
| |
| |
|Electricity |
|53.03 |
|kW |
|10.00 |
|530.30 |
| |
| |
| |
|LPG |
|83.10 |
|kilo |
|68.52 |
|5,693.95 |
| |
| |
| |
|Water |
|1.00 |
|cu. m. |
|44.00 |
|44.00 |
| |
| |
| |
|Palm Oil (85kgs x 4 per deep fryer) |
|95.40 |
|kilo |
|8.44 |
|805.18 |
| |
| |
| |
|Labor Cost (Section Head) |
|11.00 |
|man-hr |
|39.47 |
|434.17 |
| |
| |
| |
|(Production Associate) |
|11.00 |
|man-hr |
|38.13 |
|419.43 |
| |
| |
| |
|Raw Material Output |
|453.96 |
|kilo |
|195.74 |
|88,855.78 |
| |
| |
| |
|less Shrinkage |
|448.72 |
|kilo |
|- |
|- |
| |
| |
| |
|less Used Pork Lard |
|95.40 |
|kilo |
|- |
|- |
| |
| |
| |
|Recovery |
|453.96 |
|kilo |
|195.74 |
|88,855.78 |
| |
| |
|B.3 |
|Clefting |
| |
| |
| |
| |
| |
| |
| |
|Pork Back Skin Input |
|453.96 |
|kilo |
|195.74 |
|88,855.78 |
| |
| |
| |
|Palm Oil (85kgs x 4 per deep fryer) |
|- |
|kilo |
|- |
|- |
| |
| |
| |
|LPG |
|- |
|kilo |
|68.52 |
|- |
| |
| |
| |
|Water |
|1.00 |
|cu. m. |
|44.00 |
|44.00 |
| |
| |
| |
|Plastic (10" x 12") |
|568.00 |
|pc |
|0.87 |
|494.16 |
| |
| |
| |
|Labor Cost (Production Associate) |
|11.00 |
|man-hr |
|38.13 |
|419.43 |
| |
| |
| |
|(Production Associate) |
|11.00 |
|man-hr |
|38.13 |
|419.43 |
| |
| |
| |
|Raw Material Output (99%) |
|449.42 |
|kilo |
|200.78 |
|90,232.80 |
| |
| |
| |
|less Crumbs (1%) |
|4.54 |
|kilo |
|- |
|- |
| |
| |
| |
|Recovery |
|449.42 |
|kilo |
|200.78 |
|90,232.80 |
| |
| |
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|PELLETS STAGE - WORK IN PROCESS |
| |
|C. |
|Puffing Area |
| |
|46.80% |
| |
| |
| |
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|C.1 |
|Puffing |
| |
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| |
| |
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|Pork Pellet Input |
|- |
|kilo |
|200.78 |
|- |
| |
| |
| |
|Palm Oil (17kgs initial, 12kgs tap-up) |
|- |
|kilo |
|25.30 |
|- |
| |
| |
| |
|Electricity |
|- |
|kW |
|10.00 |
|- |
| |
| |
| |
|LPG |
|- |
|kilo |
|68.52 |
|- |
| |
| |
| |
|Water |
|- |
|cu. m. |
|44.00 |
|- |
| |
| |
| |
|Labor Cost (Section Head) |
|- |
|man-hr |
|39.47 |
|- |
| |
| |
| |
|(Production Associate) |
|- |
|man-hr |
|38.13 |
|- |
| |
| |
| |
|Material Output |
|- |
|kilo |
|- |
|- |
| |
| |
| |
|less Used Pork Lard |
|- |
|kilo |
| |
|- |
| |
| |
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|Recovery |
|- |
|kilo |
|#DIV/0! |
|- |
| |
|D. |
|Packing Area |
| |
|#DIV/0! |
| |
| |
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|D.1 |
|Packing |
| |
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|Pork Chicharron Input |
|449.42 |
|kilo |
|200.78 |
|90,232.80 |
| |
| |
| |
|Electricity |
|60.54 |
|kW |
|10.00 |
|605.40 |
| |
| |
| |
|Water |
|1.00 |
|cu. m. |
|44.00 |
|44.00 |
| |
| |
| |
|Plastic (12" x 18") - for reject |
|45.00 |
|pc |
|2.18 |
|98.10 |
| |
| |
| |
|Labor Cost (Section Head) |
|10.00 |
|man-hr |
|39.47 |
|394.70 |
| |
| |
| |
|(Production Associate) |
|11.00 |
|man-hr |
|38.13 |
|419.43 |
| |
| |
| |
|Material Output |
|404.48 |
|kilo |
|226.95 |
|91,794.43 |
| |
| |
| |
|less Reject |
|44.94 |
|kilo |
|- |
|- |
| |
| |
| |
|Recovery |
|404.48 |
|kilo |
|226.95 |
|91,794.43 |
| |
| |
| |
| |
|90.00% |
|GOOD PORK CHICHARRON PELLETS |
| |
| |
| |
|Over-All Recovery |
|40.45% |
| |
| |
| |
| |
|RTE Pork Chicharron Pellets - 50g |
| |
| |
|11.35 |
| |
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|E. |
|Other Operational Expenses |
| |
| |
| |
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|E.1 |
|Packaging, OPP/CPP (Inside & Outside) |
|1.00 |
|pc |
|0.38 |
|0.38 |
| |
| |
|E.2 |
|Nitrogen |
|1.00 |
|pc |
|- |
|- |
| |
| |
|E.3 |
|Box, 80 packs/box |
|1.00 |
|box |
|0.20 |
|0.20 |
| |
| |
|E.4 |
|Freight, 80 packs/box |
|1.00 |
|lot |
|0.50 |
|0.50 |
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|Sub-Total |
|1.00 |
|lot |
|1.08 |
|1.08 |
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|Total Cost |
|50.00 |
|grams |
|12.42 |
| |
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| |
|1.00 |
|kilo |
|248.45 |
| |
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|PACKED & SHIPPED Pork Chicharron Pellets |
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|CBI Cost |
|Price to IA |
|GM % |
| |
| |
| |
|CBI Price / Kilo |
|248.45 |
|400.00 |
|30% |
| |
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|CBI Price / 50g |
|12.42 |
|20.00 |
|30% |
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|Inst. Price / 50g |
|20.00 |
|40.00 |
|200% |
| |
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|Inst. Price / 50g |
|20.00 |
|45.00 |
|225% |
| |
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|Inst. Price / 50g |
|20.00 |
|50.00 |
|250% |
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|RAW MAT |
|196.20 |
|86.45% |
| |
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|PALM OIL |
|1.77 |
|0.78% |
| |
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|LPG |
|14.32 |
|6.31% |
| |
| |
| |
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|LABOR |
|8.20 |
|3.61% |
| |
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|IODIZED SALT |
|0.09 |
|0.04% |
| |
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| |
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|MSG |
|0.58 |
|0.25% |
| |
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|PLASTIC FOR PELLETS STORAGE |
|1.34 |
|0.59% |
| |
| |
| |
| |
| |
|ELECTRICITY & WATER |
|4.45 |
|1.96% |
| |
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|TOTAL COST GOOD CHICHARRON |
|226.95 |
|100.00% |
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|They have 3 stages before they can produce their chicharritos. First is in the cleaning area where they receive the raw materials frozen and |
|wash and clean it. After washing and slicing, the recovery of that raw materials went down to 97% thus increasing the cost of goods against the|
|original cost of P75/unit became P80.85/unit. |
|Next is pelleting, on this stage raw material is being boiled and adding spices to enhance flavor and then deep frying it and clefting |
|(separating raw materials after being cooked). By this time, recovery is 46.80% and cost is at P200.78. |
|Next is packing area, wherein our recovery still went down to 40.45% and cost is P226.95. Additional cost would be coming from other |
|operational expenses and the total cost would be P248.85 per kilo of chicharritos. And chicharritos is being sold by 50 grams and that’s |
|P12.42. |
|They have their gross margin at 30% so their suggested selling price per 50grms is P20.00 and at 200%,225%and 220% gross margin with equivalent|
|price of P40,P45 and P50 respectively. |
|My recommendation would be to outsource cheaper raw material and find a way to increase their recovery per stages of manufacturing the product.|
|It would be more realistic if the machineries being used is included in the costing of chicharritos. |
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|1) |
|Problem 8-20 |
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|POHR |
|Estimated Cost |
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|Estimated driver |
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|DL |
|50000 |
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|OH |
|36000 |
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|Cutting |
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|Finishing |
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|DM |
| |
|80 |
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|4 |
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|DL |
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|500 |
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|310 |
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|70 |
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|150 |
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|Applied OH |
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|650 |
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|501 |
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|POHR for Cutting and Finishing |
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|360000 |
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|486000 |
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|48000 |
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|270000 |
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|7.5 |
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|1.8 |
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|Cutting |
|80 |
|*7.5 |
|6 |
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|Finishing |
|150 |
|*1.8 |
|2.7 |
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|Total Over head cost |
| |
|8.7 |
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|2) |
|Problem 9-16 |
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|WEIGHTED AVERAGE METHOD |
|PHYSICAL UNITS |
|% |
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|Begining work in process (BWIP) |
|30000 |
| |
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|Started |
|200000 |
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|Total available Inputs |
|230000 |
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|Materials Conversion |
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|Equivalent Unit |
| |
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|Completed (Transferred out) |
|190000 |
|100% |
|190000 |
|190000 |
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|Ending work in process (EWIP) |
|40000 |
|75% |
|30000 |
| |
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|60% |
| |
|24000 |
| |
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|Total Produced or Outputs |
|230000 |
| |
|220000 |
|214000 |
|217000 |
| |
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|Costs |
|Total |
| |
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| |
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|BWIP |
|67800 |
|30200 |
|98000 |
| |
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|Incurred during the period |
|579000 |
|248000 |
|827000 |
| |
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| |
| |
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|Total |
|646800 |
|278200 |
|925000 |
| |
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|Cost per Equivlent unit |
|2.94 |
|1.3 |
|4.26 |
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|Valuation |
|Total |
| |
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|Value of goods transferred out |
|558600 |
|247000 |
|805600 |
| |
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|Value of EWIP |
|88200 |
|31200 |
|119400 |
| |
| |
| |
| |
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| |
| |
| |
| |
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|925000 |
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