'A Votre Sante Teaching Note Essay\r'

'Addition on the wholey, the caseful questions require twain quantitative and qualitative analyses of the business issues faced by AVS. AVS has been apply in a graduate-level managerial history class for MBAs, and would be just about take into account for an advanced undergraduate or a graduate-level accounting or MBA course.\r\nThe detail in the case is rich enough to indorse a variety of analyses. Alternative uses could be to have the student construct a appeal of goods manufactured statement or a traditional financial statement, both of which reinforce the differences between product and boundary be. Additionally, alternative decision analysis questions could be developed using the unsettled and fixed cost structures described in the case. sequel question number two is provided one example of a authorization decision analysis question.\r\nThe contribution valuation reserve income statement ( inform Note Exhibit 1) is passably straightforward, with the following co ncepts or calculations causing the most difficulty:\r\nThe inclusion of liquor taxes and gross sales commissions in variable costs: These atomic number 18 both period set downs, but are clearly ground upon the number of bottles sold, and hence are included in the variable costs.\r\nWhere to include the fuddle-colored skipper depreciate: Since the wine-coloured master is paid check to number of blends, not number of bottles, this outlay is listed as a fixed cost. Arguably, it could be listed as a variable cost, accustomed that\r\nthe cost go away be based on the number of wines produced. As fragmentize of the discussion we will examine the rationale behind listing wine master as a fixed or a variable expense.\r\nBarrel expense: The case states that the barrels produce the equivalent of 40 cases of wine. A case of wine is post-fermentation/bottling and therefore after the 10% freeing has occurred. The barrels contain the wine at the start of the process. thitherfore, there have to be enough barrels to hold all the wine at the beginning of the process, not at the end. This factor roots in 63 (62.5) barrels being required for the harvest2.\r\n didactics Note Exhibit 1: portion Margin Income Statement\r\nPart b asks, â€Å"What is the maximum amount that AVS would pay to misdirect an redundant pound of chardonnay grape grapes?” There are three parts to cypher this answer: the benefit from the additional chardonnay grape wine to be sold, the pertinent costs related to producing this wine and the opportunity cost of not producing as much Blanc de Blanc wine.\r\nTeaching Note: Exhibit 2 displays the calculations relevant to this decision. Chardonnay regular wine requires a 2 to 1 mixture of Chardonnay and generic wine blanched grapes. Therefore, the 18,000 pounds of Chardonnay grapes will be combined with 9,000 pounds of generic white grapes.\r\nThe 27,000 pounds of grapes will result in an additional 9,000 bottles of new Chardonnay reg ular wine being produced. However, it will also result in a 3,000-bottle decrease in the amount of Blanc de Blanc wine produced, since some generic grapes will now be apply for the Chardonnay-regular wine. Recall that only Chardonnay wine is processed in barrels.\r\n'