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Turkey Mash Case Study

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DBA 8552 - Unit I: Management Accounting and Control Systems Old Turkey Mash Wiskey Case Study

Original Income Statement: Base Year Year 1 Year 2 Year 3 Production (distilled gallons) $500,000.00 $600,000.00 $700,000.00 $800,000.00
Aged gallons sold $400,000.00 $400,000.00 $400,000.00 $400,000.00

Warehouse Inventory at the Beginning of Year
4-year-old bbls $10,000.00 $10,000.00 $10,000.00 $10,000.00
3-year-old bbls $10,000.00 $10,000.00 $10,000.00 $10,000.00
2-year-old bbls $10,000.00 $10,000.00 $10,000.00 $12,000.00
1-year-old bbls $10,000.00 $10,000.00 $12,000.00 $14,000.00
New bbls added $10,000.00 $12,000.00 $14,000.00 $16,000.00
Total bbls to be aged in year $50,000.00 $52,000.00 $56,000.00 $62,000.00
(bbls = barrels) Revenues $6,000,000.00 $6,000,000.00 $6,000,000.00 $6,000,000.00
Less:
Cost of goods sold: 10,000 bbls @ 100/bbl $1,000,000.00 $1,000,000.00 $1,000,000.00 $1,000,000.00 Oak barrels $750,000.00 $900,000.00 $1,050,000.00 $1,200,000.00 Warehouse rental $1,000,000.00 $1,040,000.00 $1,120,000.00 $1,240,000.00 Warehouse direct costs $2,500,000.00 $2,600,000.00 $2,800,000.00 $3,100,000.00 Net Income (loss): Before taxes $750,000.00 $460,000.00 $30,000.00 -$540,000.00
Income taxes (30%) $225,000.00 $138,000.00

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