Table of Contents

I.

II.

III.

Company and Business Profile

1.1 Name and Address

1.2 Ownership and form

1.3 Mission and Vision Statement

1.4 Objectives and Core values

1.5 Nature of Business

1.6 Brief History

1.7 Statement of Financing

Product/Service

2.1 Product/Service Description

2.2 Product/Service Benefits/Advantage

11

2.3 Product Sources

12

Operation/Production

3.1 Process or Methodology

13

13
1

IV.

V.

3.2 Technology/Facility Used

13

3.3 Manpower Requirement

16

3.4 Operating hours

16

Market Analysis

17

4.1 Industry Description and Outlook

17

4.2 Target Market Segmentation

18

4.3 Market needs and opportunities

19

4.4 Market Trend

19

4.5 Competitors

20

Marketing Strategy

21

5.1 Competitive Edge

21

5.2 Place or Location

21

5.3 Pricing

22

5.4 Promotion

23

5.5 Distribution

23

5.6 Packaging

24

5.7 Delivery

25

VI.

VII.

Management Organization

26

6.1 Organizational Chart

26

6.2 Management Profile

27

6.3 Functional Department

30

Financial Plan

32

7.1 Start-up Cost

34

7.2 Operational Cost

35

7.3 Sales Forecast

37

7.4 Cost Sales Forecast

39

7.5 Projected Financial Statements

44

7.6 Break-even Analysis

47

7.7. Financial Ratio Analysis

51

VIII. Appendices

Introductory
1

Name and address of the Business

The business will be named 4Js Cupcakes. Its production area will be situated

at Lumbo, Valencia City, Bukidnon while its store for display will be located in Alkuino
Emporium. The location will be advantage to the business since its target market is
mostly students. The business derived its name from the combined initials of the partners.
4Js means Jasmin, Joshlyne, Jean, and Jeanne.

1.2

Ownership and form

Name

Residence

Jasmin D. Ambos

Poblacion, Esperanza, Agusan del Sur

Joshlyne Mijares

Talahiron, Kibawe, Bukidnon

Rose Jean A. Pernito

Poblacion, Esperanza, Agusan del Sur

Lovely Jeanne G. Ponce

Poblacion, Pitogo, Zamboanga del Sur

4Js Cupcakes is a general partnership organized by the partners. The capital

sources are the specific capital contribution of the partners. The profit and loss ratio are
equally divided or a percentage of 25% each partner.

1.3

Mission and Vision Statement

Mission
4Js Cupcakes mission is to provide the costumer with the finest and unique
cupcake catering. It exists to attract and maintain customers by providing the highest
quality cupcake products and the best possible services to the food industry. It will add
value to the community by maintaining a friendly, familial work environment.
Vision
Be the leading cupcake concept and benchmark for new competitors in the
market. While 4Js Cupcakes is extending its market, customer satisfaction will be the
basis for its success, and more importantly bringing the smile and laughter to all our
customers with its creative delicious cupcakes.

1.4

Objectives and Core Values

Objectives

To be a well-known cupcake store in Valencia City and gain at least 30% in total

market share.
Generate increased brand awareness quantified by reactions or feedbacks of
customer.

To expand overall business operation and an addition of product line of the

business.
Reach profitability within 1-3 years and maintain positive steady growth each
month.

Core values

The 4Js Cupcake Delicacies, as part of its corporate social responsibility

is bound and devoted to provide its clientele quality products and products for the
attainment of the business goals and objectives and of course customer satisfaction.
Specifically, it aims the following values:

Customer Service - Every person who walks through the door is considered as a

friend. Treat them with love and respect.

Great Cupcake - 4Js Cupcake never serve a cupcake not to be proud of.
Inclusive - An organization that does not align itself with any particular politics.
Providing a Fun Experience - Let the costumer express their own emotions
through cupcake designing. The smells, sounds and taste should catapult everyone

back in time and provide each person with a fun and enjoyable experience.
Associative - Work hand-in-hand to achieve the common goal of creating value

for customers.
Excellency - Be the leading supplier for customized celebration cupcakes
providing quality products to the markets.

1.5

Nature of the business

4Js Cupcakes is part of food industry specifically bakery industry that offers
different flavors of cupcakes with affordable and reasonable prices that caters students,
employees, married couple and even travellers from neighbouring places.

Since 4Js Cupcake actually makes its own cupcake from scratch, it is a
manufacturer because they buy their ingredients pre-made, prepare them to an edible
state, and then sell it. It is also a service retailer because it sells cupcake to the public and
offers delivery to costumers. Hence, it performs a service.

1.6

Brief History

As a business student graduates; Jasmin, Lovely, Joshlyne and Rose Jean form a
partnership and engage in business. They decided to put up a cupcake business because of
their passion for food. For some reason, the bakery industry is on a rise. Many people
have full-time jobs, and dont have enough time to bake, so they hire a professional to do,
thats where 4Js Cupcake comes in. However, included in the main reason why we come
up with the business is seeing the great opportunity that the Valencia City lacks a food
chain business that offers unique and satisfactory products with affordable prices and
service. Unique, since it allows the costumer pick up their designs and express oneself
and enable order-delivery transaction at their convenience for an additional charge.
1.7

Statement of Financing

The initial investment of the business amounted to P 1,200,000.00 of

which all the following partners: Jasmin, Joshlyne, Lovely and Rose Jean will contribute
equal investment in the amount of P300, 000.00. The money contributed by the partners
will cover the expenses incurred and the assets to be acquired that will be used in the
normal course of the business operations and the industrial partners expertise in food
preparation and processing. This investment will also cover the rent payment for the
space that will be used by the partnership.

II.

Product/Service

2.1

Product/Service Description

More and more people have busy careers and dont have the time to bake for
special occasions which will result to a high demand for cupcakes. 4Js Cupcakes is a
confectionery business in Valencia City that sells high-end cupcake goods to retail and
wholesale customers.

It makes plain cupcakes with sides of icing, frosting, gel, sprinkles, marshmallows
and sugary decorations to work with. The designs of the cupcakes will be unique,
colourful and eye-catching; people will be drawn into them, with their small shape and
cute appearance. 4Js cupcake icing and sprinkles will come in a variety of colours. The
business will design some cupcakes based on different seasons and holidays. In addition,
customers can personalize designs on their cupcakes in such a way that they able to
express their self and form it into amazing objects. The products of 4Js Cupcakes are the
following:

Ordinary Cupcake
Life Cupcake
Simple Cupcake
- Medium Vanilla Cupcake
- Medium Ube Cupcake
- Medium Chocolate Cupcake
Complex Cupcake
9

- Chocolate Cupcake

- Strawberry Cupcake
- Vanilla Cupcake
Cupcake with styles

Vanilla Cupcake
Ube Cupcake
Chocolate Cupcake
Strawberry Cupcake

Since catering and delivery service is a great way to set your cupcake business
apart from your competitors. 4Js Cupcake allow customers to pre-order their cupcakes
and arrange for the sweet treats to be delivered to their homes, offices and other locations
for special events. The business may also go a step further and develop a website where
customers can customize their orders.
2.2

Product/Service Benefits/Advantage

The benefits of cupcakes are that it can give a small sugar rush, and can
moderately fill a persons appetite. The features of cupcakes are that it makes a special
occasion better, and can replace a normal cake. Since this is a perishable baked good,
cupcakes have a best before date. 4Js Cupcakes personnel in charged will tell the
costumers to eat the cupcakes the day they are purchased or the day after, so that the
cupcakes are fresh and enjoyable. The company can also make little stickers to indicate
the best before date.

10

Many people have dietary restrictions that make it difficult for them to eat
traditional cupcakes. The distinct business idea of 4Js Company is to bake cupcakes that
accommodate a variety of dietary restrictions. According to MayoClinic.com, the top
food allergens include gluten, dairy, nuts and soy. As such, add specialty cupcakes to the
menu that are gluten-free, dairy-free or soy-free. These options will expand the business
to an untapped consumer market. Customers with dietary limitations will be thrilled to eat
cupcakes that are specially baked for their needs.

2.3

Product Sources
The ingredients to be used in making cupcakes will come mainly from Valencia

City in SSK77 store situated in front of Bao Sheng in Guinoyoran Road. Specifically,
the baking soda, oil, salt, butter, sugar, eggs, different flavoured products such as vanilla,
strawberries, chocolate and ube, sugary decorations such as icing, marshmallows,
frosting, sprinkles. The flour will be purchased at the Golden Warehouse in front of GV
Hotel at Sayre Highway, Valencia City. The milk will be taken at Philippine Carabao
Center at Maramag, Bukidnon. Through these, it can save and minimize costs which

11

could be a great advantage in the business. Drinks will be delivered by the supplier to
minimize transportation costs.

III

Operation/ Production

3.1

Process/Methodology
The business will rent a vacant space available for business atAlkuino Emporium,

Valencia City, Bukidnon. Establishment and expanding of branches to different places

will occur after the prosperous operation of the business subject for the unanimous
decision by partners.
12

The following requisites are needed to start the business operation:

3.2

Business permit from the Valencia City

Sanitary Permit
Clearance needed for approval of operation
Other documents necessary for the legality of business and its security.

Technology/Facilities
The business will be using the following utensils and equipment for the operation

of business:

Food preparation utensils: (P77000)

Knives
Plates
Glasses
Forks
Spoons
Oven
Saucers
Bowls
cupcake stands
ladle
mixer
blender
kitchen utensils needed for forming different cupcakes.

Kitchen Equipment
Refrigerator
Electric stove with oven

Store Entertainment
Audio devices
Air-conditioner
POS Machine

Furniture and fixtures

13

 Tables
chairs
Straight-line method will be used in computing for annual depreciation for non-current
assets. Thus:

Equipment

Acquisition cost

Refrigerator
P 27000
Electric Stove w/ P 50000
oven
Audio device
Air-conditioner
POS Machine
Table
Chairs
Delivery Van
TOTAL

3.3

P 11000
P 17000
P 12000
P 2000
P 4000
P300,000
P123000

Salvage

Estimated Useful Life

Annual

(in years)

Depreciation
P1200
P3000

Value
P3000
P5000

20
15

P2000
P2000
P0
0
0
P30000

5
8
10
5
5
20

P1800
P1875
P1200
P 400
P 800
P13500
P23775

Manpower Requirement

14

During the first year of operation, the business will require a driver for delivery of
products ordered. There will be an expected annual salary expense of P36, 000.

3.4

Operating Hours
The business will start to operate from 3:00am of which the employees are

required to come in time for the preparation before the normal operation. The store opens
at 8:00 a.m. and closes at 8:00 p.m.

IV.

Market Analysis

15

4.1

Industry Description and Outlook

This section contains the future views and prospective of the entity with regards

to trends and analysis of competitors, forecasts about the market and the industry it
belongs and the market segmentation.
Food is one of the basic needs of an individual. Food industry has been streaming
in the market. Different occasions tend to have specific food to be served. People prefer
to avail those that are unique, quality and cheaper in terms of prices. It is quite a
challenge to create an inimitable product that will surely attract the increase of consumer
marketability.
The current economic situation dictates the market to provide quality products yet
at an affordable cost is of the primary concern.
4-Js Cupcakes aspiration is to aid the market by providing expeditious and
delicious cupcakes at very affordable prices. Through this, the partnership will achieve
the expected rate of return at a specified period of time, gain the customers patronage,
build a better standing in this industry in the area of Valencia and achieve consistency and
success in its operations.

4.2

Target Market Segmentation

16

4 Js Cupcake Delicacies initial establishment will be in the City of Valencia. This

city has a population that will be a huge target market. The area is nearby schools,
cooperatives, malls, shops and other establishments which make it achievable to provide
such business opportunity. The partnership will focus on extending marketing activities to
high school and college students which will comprise the 45% of the revenues. Married
couples will comprise the 25% of the revenues.

The employees working on the

establishments located near the area will consist the 20% of the revenues and the
remaining 10% who dont belong to the classifications mentioned above. The market
research presents that these are the customer groups that are most likely to patronage the
products.

17

Target Segmentation

Not Classify; 10%

Employees; 20%
Students; 45%

Couples; 25%

Figure 4.1. Market Segmentation

4.3

Market Needs/Opportunity
The place of Valencia as one of the City of Bukidnon is already in the verge of

socialization. The people within and even in the nearby places are looking for delicacies
that are not just simple and ordinary but those that are rare and extraordinary for special
occasions. And this bequeathed us an idea to create a shop that offers not just cupcakes
but extravagantly unique cupcakes similar to a cake ordinary which address the
18

expanding needs of the public. As humans are celebrating both special and even just
ordinary occasions, this business would certainly survive.
4.4

Market Trend
The current status in the food industry is incredibly changing as the country is

progressing and developing. Angel Cachuela, Trade Commissioner-Consumer products,

stated that the increasing urbanization of the local population has changed the local
retail food market, and is seen as the driver in the lifestyle change amongst
consumers. There is a big market for retail food products in the Philippines. Food is
considered the highest expenditure in each Philippine household, with an average of
35% spent on food products. Considered price sensitive, they assess the value of
products before purchase, vis--vis their retail price. The priority imported retail
product categories sought after in the Philippine market are snacks or crunchers such as
biscuits and chips and individual-packed pastries including cakes, cookies and
cupcakes.
As one of the sought after products by Filipinos, the partnership has come to
operate an entity that serves cupcakes for its fellow citizens. Through time, the
partnership is striving to reach its desired objectives in providing services to its valued
customers. It will commence its business operation renting the space in Alkuino
Emporium. Continuing the progress of this entity, it will likely open branch stores in the
different municipalities in Bukidnon. Upon reaching its fifth year of success, the
partnership will open its door to further investors and capitalists towards the adoption of
the business into a corporation. Growing and growing into the bigger scope of market, the
19

island of Mindanao will be definitely covered and the business entity will explore more
into the national wide level of business expansion.

4.5

Competitors
Competition is very much likely to exist in the business world. Bakebites,

Goldilocks and Jocels are the main competitors of 4Js Cupcakes and not to mention
other shops that are offering cakes and cupcakes in their own. Bakebites located in the
Roy Plaza; Goldilocks in NVM Mall; Jocels situated at the side of the public market.
In addition, one of the nationals distributors of delicacies is the Angels Log. The
goods that it serves are the highest quality of taste. But as the worth gets higher and so
does the prices it offers. The other company that also offers such delicacies is the
Bakebites, Jocels and Goldilocks. Many are buying in this entity because it offers
delicacies at an affordable price. But still, the satisfaction that customers are looking for
has not been fulfilled. The advantage point in these entities is that they are located in an
area where people frequently visit the most. And for they were located as such, the prices
in comparison to the quality of delicacies they are serving are quite not fair.
V.

Marketing Strategy

5.1

Competitive Edge

Advantages 4Js Cupcakes have over to its competitors.

20

First business entity in the city that would offer different service related in decorating

or shaping cupcakes to any dimension their costumer prefers.

Cater and deliver services to costumer and allow them to tell whatever they want to
do in their particular orders.
It keeps on updating to any innovation to expand and stay on track.

5.2

Place or Location

4Js Cupcakes main store is situated at the Alkuino Emporium, Valencia City,
Bukidnon and its production area is located at Lumbo, Valencia City. The location is
projected to effectively accommodate the targeted market, the general public. In addition,
the store is placed where in the costumer could have an easy access thereof.

5.3

Pricing

It is stated in the mission to ensure the satisfaction of its customers and for the
business to continue to remain in service, 50% mark-up rate based on its cost incurred to
the products offered will be deemed reasonable.

Product

Description

Price
21

Ordinary Cupcake

- small and plain cupcake

- medium cupcake designed a little to serve one person

P10/piece

- baked in a small thin paper or aluminium cup

Cupcake with Style
1
2
3
4

Vanilla
Chocolate
Strawberry
Ube

- topped with frosting or other cake decorations

P20.00/piece

- they may be filled with frosting, fruit, or pastry cream

P20.00/piece

P20.00/piece
P25.00/piece

Life Cupcake

- -these cupcakes are composed of ordinary, plain,

complex cupcakes which can be form into an object
with the suggestion of the buyers regarding on the
designs and object to be formed.

1 Simple Cupcakes

- comes with variety of flavors such as:

2 Complex
Cupcakes

Medium Vanilla Cupcake

Medium Ube Cupcake
Medium Chocolate Cupcake

P350/order
P600/ order
P400/ order

- comes with variety of flavors such as:

Chocolate Cupcake
Strawberry Cupcake
Vanilla Cupcake

P500/ order
P650/ order
P450/ order

22

5.4

Promotion

To catch the attention of the customers, business will launch and advertise its
products or offers through flyers and poster. It will also use the World Wide Web.
Specifically, the social media give and make its own webpage, in order the public will be
aware to the service they offer.

5.5

Distribution

Since it is the nature of the business to cater and deliver service, the product will
be directly delivered to the customer homes or other location where the special event will
be held in and to assure that the satisfaction of the costumer will be met, the business
team will be the one to set up the decorated cupcakes based on the theme of the occasion
(as requested).

5.6

Packaging

The Life Cupcake will be put in a box appropriate to its sizes. Moreover, the
business will make sure to maintain the cleanliness of the products. For other category of
cupcakes, when a customer order or buy half (1/2) dozen to one (1) dozen it is preferable
to put it also in a box according to its sizes. The order less than half dozen will be put in a
paper bag.
23

5.7

Delivery

The product named Life Cupcake will be delivered directly within the City of
Valencia as requested by the buyer, which is the principal location of the firm and the
scope of its limitations. However, the costumer may prefer to pick up the product at the
store. The additional charges for delivery will be P50.00 minimum. The amount collected
shall be considered as other income since the cost of gas for the delivery will be
considered an expense. There is a 50% expected delivery in every life complex cupcake
ordered.
24

VI.

Management and Organization

6.1

Organizational Chart
This part entails the information regarding the positions and responsibilities of the

respective employees in the business.

25

Ms. Joshlyne M. Mijares

General Manager

Ms. Lovely Jeanne G. Ms. Jasmin D.

Ponce
Ambos
Marketing Manager Financial Manager

6.2

Ms. Rose Jean A.

Pernito
Operation and Human
Resource Manager

Management Profile

Name
Ms. Joshlyne M. Mijares

Profile
A degree holder of Bachelor of

Responsibility
-to oversee activities directly

General Manager

Science in Accountancy in Central

related to the operation of

26

Mindanao University

business
-to review financial

A lover of food and most likely

statements, sales and activity

delicacies

reports, and other performance

Attended few seminars and

data to measure productivity

trainings regarding leadership and

and goal achievement

managerial skills.

-to manage staff, preparing

work schedules and assigning
specific duties
-to establish and implement
departmental policies, goals,
objectives, and procedures
-to determine staffing
requirements, and interview,
hire and train new employees,
or oversee those personnel
processes
-to plan and direct activities
such as sales promotion,
coordinating with other

Ms. Lovely Jeanne G.

A degree holder of Bachelor of

department heads as required

-to coordinate with the quality

Ponce

Science in Accountancy in Central

assurance personnel in

Marketing Manager

Mindanao University

ensuring that the goods meet

27

an acceptable standard and

An exceptional experienced

generates positive feedback

supervisor in work and has a

from clients.

remarkable track record in the field

-to determine the type of

of managing operations

equipment needed to fulfill the

organizational quality policy

A diploma holder in commercial

-to monitor the operations of

cooking and culinary arts majoring

the entity from time to time

Ms. Jasmin D. Ambos

in baking and pastry

A Degree holder of Bachelor of

-responsible for the finances,

Financial Manager

Science in

payrolls, billings, taxes and

Accountancy

other matters related to the

management of the entitys

With an undeniable proficiency and finances

understanding in bookkeeping,
account handling and auditing

A diploma holder in commercial

cooking and culinary arts majoring
in baking and pastry

28

Ms. Rose Jean A. Pernito

A degree holder of Bachelor of

-responsible for hiring new

Human Resource and

Science in Accountancy

employees

Operation Manager

-in charge in the development

An adept in the field of human

and training of the employees

resource and is very erudite in

-to ensure the smoothness of

labor legislation and labor

operations in various

practices.

processes that contribute to

the production of goods and

A diploma holder in commercial

services of the organization

cooking and culinary arts majoring

in baking and pastry

6.3

Functional Department

Floor Plan

29

Chair-

Front Display Rack-

TableDoor-

Side Display Rack-

30

Business Location

Commercial Spaces

Valencia
Public Market

Emporiu
m
Building
Maramag

Commer
cial
Spaces

SAN AUGUSTINE
INSTITUTE OF
TECHNOLOGY

Commercial Spaces

Land
Bank

TH
Valencia

Jollibe
e

NVM
Mall

Cagayan de Oro
City

31

VII.

Financial Plan

This page contains the financial assumptions, projected income statement, projected
balance sheet, and statement of cash flows, beak-even point analysis and source of funds.

Calendar year will be used by the entity in accounting the financial transactions.
Sales will be 100% made in cash. Sales in second year will increase 20% based on prior
year of sales and on third year of business, sales is expected to increase 30% based on

first year of sales.

The rent expense is arises from a P5,700 (monthly) for the store and P2,500 (monthly) for

the production area.

There will be an increase of 10% in the variable cost of sales and 15% in the second and

third year of operation respectively.

It assumes a 30% income tax expense.
The estimated order from customer of different product is shown in next page

32

Products

Expected no. of orders

weekly

Life Cupcakes:
Simple Cupcake
Medium Vanilla Cupcake
Medium Ube Cupcake
Medium Chocolate
Complex Cupcake

8 orders
4 orders
6 orders

Chocolate Cupcake

3 orders

Strawberry
Vanilla
Cupcake w/ style
Vanilla Cupcake
Ube Cupcake
Chocolate Cupcake
Strawberry Cupcake
Ordinary Cupcake

7.1

4 orders
7 orders
150 pieces
120 pieces
150 pieces
150 pieces
720 pieces

Start-up Capital
The partners will contribute 300,000 each as source of capital. In its first

year of operation, the business is expected to incur expenses

related

to

its

start

up.

Estimated expenses are as follows:

33

Quantity
Rent Expenses
Office Supplies
Bookkeeping and other office supplies
POS machine
Subtotal

Unit cost

Total Cost
98,400

P12000

P10000
P12000
P22000

Promotional and Marketing Expenses

Flyers
Radio Advertisement
Subtotal

P12000
P40000
P52000

Legal Expenses
SEC Registration
Business Permit
Sanitary Permit
Clearances
Other legal Expenses
Subtotal

P20000
P3000
P1500
P1000
P3000
P28500

Equipment and other facilities

P500000

Miscellaneous Expenses
Cleaning Materials

P5000

Lease Improvement

P10000

TOTAL

7.2

P715,900.00

Operational Expenses (Annually)

On the succeeding years of operation, the business is expected to incur the

following expenses related to its operation.

34

Quantity
Rent Expenses
Office Supplies
Bookkeeping and other office supplies
Subtotal

Unit cost

Total Cost
98,400
P10000
P10,000

Promotional and Marketing Expenses

Flyers and other promotional paraphernalia
Radio Advertisement
Subtotal

P12,000
P40,000
P52,000

Legal Expenses
Business Permit
Sanitary Permit
Clearances
Other legal Expenses
Subtotal

P3,000
P1,500
P1,000
P3,000
P8,500

Miscellaneous Expenses
Cleaning Materials

P5,000

Utilities Expenses
TOTAL

P120,000
P293,900.00

35

7.3

Sales Forecast
3-year Sales Forecast
Sales in Pesos (Php)
Orders per Week

Price(in Php)

Year 1

Year 2

Year 3

Life Cupcakes
Simple Cupcake
Vanilla Cupcake

350.00

140,000.00

168,000.00

182,000.00

Medium Ube Cupcake

Medium Chocolate

4
6

600.00
400.00

120,000.00
120,000.00

144,000.00
144,000.00

156,000.00
156,000.00

Complex Cupcake

Chocolate Cupcake

500.00

75,000.00

90,000.00

97,500.00

Strawberry

4
7

650.00

130,000.00

156,000.00

169,000.00

450.00

189,000.00

204,750.00

150

20.00
25.00
20.00
20.00
10.00

157,500.00
150,000.00
150,000.00
150,000.00
150,000.00
360,000.00
P 1,702,500.00

180,000.00
180,000.00
180,000.00
180,000.00
432,000.00
P 2,043,000.00

195,000.00
195,000.00
195,000.00
195,000.00
468,000.00
P 2,213,250.00

Vanilla
Cupcake w/ style
Vanilla Cupcake
Ube Cupcake
Chocolate Cupcake
Strawberry Cupcake
Ordinary Cupcake
TOTAL

120
150
150
720

36

It assumes 50 weeks a year. Thus, estimated no. of order per week is multiplied to 50 to get the order annually.
The increase in sales in Year 2 and Year 3 is 20% and 30% respectively.

Weekly Sales
8,000.00
7,000.00
6,000.00
5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
-

Figure 7.1 Projected Weekly Sales

37

7.4

Cost of Sales

Cost of Cupcake Production

Life Simple Cupcake
An estimate of 60 cupcakes in every form
One form=One order
Medium Vanilla cupcake

Ingredients
All-purpose flour
Sugar(Granulated
)
Baking powder
Salt
Shortening oil
Evaporated Milk
Vanilla Extract
Large eggs
Frosting
TOTAL

Medium UBE Cupcake

Ingredients Quantity
Price
All-purpose flour 4 1/2 cups P22
Sugar
2 2/3 cups P25.6
Baking powder
6 teaspoons P15
Salt
1 teaspoon P1
Shortening
1 cup
P24
Evaporated Milk 2 cups
P60
Ube flavoring
40 ml
P97
Large eggs
6
P30
Yoghurt
cup
P80
Frosting
P50
TOTAL
P404.6

Quantity
4 1/2 cups
2 2/3 cups

Price
P22
P25.6

6 teaspoons
1 teaspoon
1 cup
2 cups
2 teaspoons
4

P15
P1
P24
P60
P10
P22
P50
P229.6
Medium Chocolate Cupcake

39

Life

Ingredients
All-purpose flour
Sugar
Baking powder
Salt
Shortening Oil
Evaporated Milk
Vanilla Extract
Large eggs
Unsweetened
Chocolate
Frosting
IngredientsTOTAL Quantity

Quantity
4 1/2 cups
2 2/3 cups
6 teaspoons
1 teaspoon
1 cup
2 cups
2 teaspoons
4
2 cups

Price
P22
P25.6
P15
P1
P24
P60
P10
P22
P30

Complex Cupcake
An estimate of 60
cupcakes for Chocolate
and Vanilla while 70
pieces for strawberry in
every form.
One form=One order
Strawberry Complex Cupcake

Ingredients Quantity
Price
P50
All-purpose
flour
4

cups
P22
P259.6
Price
Sugar
2
2/3 P25.6
All-purpose flour
3 cups
P14.52
cups
Strawberry Jam
300 ml
P77
Baking powder
9
P30
Sugar (granulated) 3 cups
P33.6
teaspoons
Baking powder
2
P15
Salt
1teaspoon
P1
tablespoons
Shortening
2 cup
P24
Salt
2 teaspoon P1
Milk(Evaporated 2 cups
P60
Cake flour
3 cups
P14.25
Milk (Evaporated) 2 cups
P75
)
Large eggs
8
P44
Vanilla Extract
2
P10
Vanilla Extract
4 teaspoons P20
teaspoons
Unsalted butter
2 cups
P90
Large eggs
4
P22
Frosting
P50
Unsweetened
3 cups
P45
TOTAL
P434.37
Chocolate
Enhancing cost
P100
TOTAL
P339.6
Chocolate Complex Cupcake

Complex Vanilla Cupcake

Cupcakes with Design/Style

Ingredients
All-purpose flour
Sugar(Granulated
)
Baking powder
Salt
Shortening oil
Evaporated Milk
Vanilla Extract
Large eggs
Frosting
TOTAL

Quantity
4 1/2 cups
2 2/3 cups

Price
P22
P25.6

6 teaspoons
1 teaspoon
1 cup
2 cups
2 teaspoons
4

P15
P1
P24
P60
P10
P22
P100
P287

Vanilla cupcake (for 40 cupcakes)

Ingredients
Quantity
Price
All-purpose flour 4 1/2 cups
P22
Sugar(Granulated 2 2/3 cups
P25.6
)
Baking powder
6 teaspoons P15
Salt
1 teaspoon
P1
Shortening oil
1 cup
P24
Evaporated Milk
2 cups
P60
Vanilla Extract
2 teaspoons P10
Large eggs
4
P22
Frosting
P150
TOTAL
P329.6
Cost Per Cupcake = P8.24
Ingredients
UBE
Cupcake All-purpose flour
(for 40 cupcakes) Strawberry Jam
Ingredients
Quantity
Price
Sugar (granulated)
All-purpose
4 1/2
cups powder
P22
Baking
Salt
flour
Cake
flour P25.6
Sugar
2 2/3
cups
Milk (Evaporated)
Baking powder 6 teaspoons
P15
Large eggs P1
Salt
1 teaspoon
Vanilla Extract
Shortening
1 cup
P24
Unsalted butter
Evaporated
2 cups
P60
Frosting
Milk
Ube flavoring
40 TOTAL
ml
P97
Large eggs
6
P30
Yoghurt
cup
P80
Frosting
P150
TOTAL
P504.6

Cost Per Cupcake = P12.62

Chocolate Cupcake (for 40

cupcakes)

Ingredients
Quantity
Price
All-purpose flour 4 1/2 cups
P22
Sugar
2 2/3 cups
P25.6
Baking powder
6 teaspoons
P15
Salt
1 teaspoon
P1
Shortening Oil
1 cup
P24
Evaporated Milk
2 cups
P60
Vanilla Extract
2 teaspoons
P10
Large eggs
4
P22
Unsweetened
2 cups
P30
Chocolate
Frosting
P150
TOTAL
P359.6
Cost per Cupcake = P8.99
Strawberry Cupcake (for 50 cupcakes)
Quantity
3 cups
300 ml
3 cups
2 tablespoons
2 teaspoon
3 cups
2 cups
8
4 teaspoons
2 cups

Price
P14.52
P77
P33.6
P15
P1
P14.25
P75
P44
P20
P90
P150
P534.37

Cost
Cupcake
P10.6

per
=

Ordinary Cupcake
Vanilla cupcake (for 60 cupcakes)
Ingredients
All-purpose flour
Sugar(Granulated
)
Baking powder
Salt
Shortening oil
Evaporated Milk
Vanilla Extract
Large eggs
Sprinkles
and
other
TOTAL

Quantity
4 1/2 cups
2 2/3 cups

Price
P22
P25.6

6 teaspoons
1 teaspoon
1 cup
2 cups
2 teaspoons
4

P15
P1
P24
P60
P10
P22
P50

Ingredients
Quantity
Price
All-purpose flour
4 1/2 cups
P22
Sugar
2 2/3 cups
P25.6
Baking powder
6 teaspoons P15
Salt
1 teaspoon P1
Shortening Oil
1 cup
P24
Evaporated Milk
2 cups
P60
Vanilla Extract
2 teaspoons P10
Large eggs
4
P22
Unsweetened
2 cups
P30
Chocolate
Sprinkles and other
P50
TOTAL
P259.6
Cost Per Cupcake = P6.74

P229.6

Cost Per Cupcake = P3.83

Ingredients
UBE Cupcake (for
All-purpose flour
60 cupcakes)
Strawberry Jam
Sugar (granulated)
Ingredients
Quantity
Price
powderP22
All-purpose flour
4Baking
1/2 cups
Sugar
2 2/3 cups
P25.6
Baking powder
6 teaspoons P15
Salt
1Salt
teaspoon
P1
Shortening
1Cake
cup flour P24
Evaporated Milk
2Milk
cups(Evaporated)
P60
Large
Ube flavoring
40
ml eggs P97
Large eggs
6Vanilla ExtractP30
butterP80
Yoghurt
Unsalted
cup
Sprinkles and P50
other
Sprinkles and other
TOTAL
TOTAL
P404.6

Quantity
3 cups
300 ml
3 cups
2
tablespoon
s
2 teaspoon
3 cups
2 cups
8
4 teaspoons
2 cups

Price
P14.52
P77
P33.6
P15

P1
P14.25
P75
P44
P20
P90
P50
P434.37

Chocolate Cupcake (for

60 cupcakes)
Cost per
Cupcake =
P4.32
Strawberry
Cupcake (for 50
cupcakes)
Cost per Cupcake =
P7.23

The total of each product refers to the cost per order of the product.
The prices are based on the current prices of the market.
If the quantity of cupcakes the customer buys reaches in at least 6, it will be

properly packaged. The cost will be the same as if it was bought individually.
Utilities Expense of P72, 000.00 related to production will be added to the fixed
cost of every cupcake equally in determining breakeven.

7.5 Projected Financial Statements

7.6

Breakeven Analysis

Break-even Point Analysis ( in Pesos )

Product

Units in a
Year*
24000

Sales
Mix(a)
140000

Sales Mix
Ratio(b)
0.082232012

Selling
Price
350

Cost/unit( c )

CM/unit(d)

256.1846154

93.81538462

12000

120000

0.070484581

600

431.1846154

168.8153846

18000

120000

0.070484581

400

286.1846154

113.8153846

9000

75000

0.044052863

500

366.1846154

133.8153846

C-Strawberry
Cupcake
C-Vanilla Cupcake

14000

130000

0.076358297

650

465.3853846

184.6146154

21000

157500

0.092511013

450

313.5846154

136.4153846

Vanilla Cupcake-S

7500

150000

0.088105727

20

8.683076923

11.31692308

Ube Cupcake-S

6000

150000

0.088105727

25

13.06307692

11.93692308

Chocolate Cupcake-S

7500

150000

0.088105727

20

9.433076923

10.56692308

Strawberry CupcakeS
Ordinary Cupcakes

7500

150000

0.088105727

20

11.13307692

8.866923077

36000

360000

0.211453744

10

5.973076923

4.026923077

Medium Vanilla
Cupcake
Medium Ube
Cupcake
Medium Chocolate
Cupcake
C-Chocolate Cupcake

CM
Ratio(e)
0.26804395
6
0.28135897
4
0.28453846
2
0.26763076
9
0.28402248
5
0.30314529
9
0.56584615
4
0.47747692
3
0.52834615
4
0.44334615
4
0.40269230

Composite
CM Ratio(f)
0.022041794
0.01983147
0.020055574
0.011789902
0.021687473
0.028044279
0.049854287
0.042068451
0.046550322
0.039061335
0.085150796

8
162500

1702500

0.386135683

Formulas:
*50 weeks in a year
a- Forecasted sales in year 1
b- Sales Mix/Total Sales Mix
c- Cost of cupcake + Cost of variable overhead
229.6 + (((MVC in a year /162500 cupcakes in a year)*72000)/MVC)*number of cupcakes in an order)
d- Selling Price - Cost/Unit
e- CM per Unit / Selling Price
f- Sales Mix Ratio*CM Ratio
Fixed Cost(FC)

= Annual rent expense

Fixed Overhead
Operating
Expenses (All is Fixed)

98400
36000
229275
363675

Ave. CMR

0.386135683

CBEP= FC/AVE. CMR

941,832.15

Product

Units in a
Year*

Sales Mix
(a)

Salex Mix
Ratio(b)

Selling
Price

Cost/unit( c )

CM/unit (d)

Composite
CM/unit( e )

Medium Vanilla
Cupcake

24000

400

0.006051437

350

256.1846154 93.81538462

0.56771791

Medium Ube Cupcake

12000

200

0.003025719

600

431.1846154 168.8153846

0.510787851

Medium Chocolate
Cupcake

18000

300

0.004538578

400

286.1846154 113.8153846

0.516559991

C-Chocolate Cupcake

9000

150

0.002269289

500

366.1846154 133.8153846

0.303665774

C-Strawberry Cupcake

14000

200

0.003025719

650

465.3853846 184.6146154

0.558591877

C-Vanilla Cupcake

21000

350

0.005295008

450

313.5846154 136.4153846

0.722320493

Vanilla Cupcake-S

7500

7500

0.113464448

20

8.683076923 11.31692308

1.284068428

Ube Cupcake-S

6000

6000

0.090771558

25

13.06307692 11.93692308

1.083533108

Chocolate Cupcake-S

7500

7500

0.113464448

20

9.433076923 10.56692308

1.198970092

Strawberry Cupcake-S

7500

7500

0.113464448

20

11.13307692 8.866923077

1.006080531

36000

36000

0.544629349

10

5.973076923 4.026923077

2.193180496

162500

66100

O-Vanilla Cupcake

Break-even Point in Units

Formulas:
*50 weeks in a year
a- Forecasted sales in year 1

9.945476551

b- Sales Mix/Total Sales Mix

c- Cost of cupcake + cost of variable overhead
229.6 + (((MVC in a year /162500 cupcakes in a year)*72000)/MVC)*number of cupcakes)
d- Selling Price - Cost/Unit
e- Sales Mix Ratio*CM Ratio
Composite Breakeven Point (units) = Fixed Cost/Ave. Units Contribution Margin
=363675 /9.945476551
= 36567 units in a year or 731 units in a week

7.4

Financial Ratios

First Year of Operation

Profit Margin on Sales = Profit/Net Sales

= P200354.70/P1702500
= 11.77%
*The amount of profit by every peso of sales is 11.77 %.

Rate of return on Assets = Profit/Ave. Total Assets

= P200354.7/P1200354.7
= 16.69 %
*The overall profitability of assets is 16.69%.

Rate of return on Equity= Profit/Ave. Equity

= P200354.70/1200345.7
= 16.69%
**The overall profitability of equity is 17.92%.
Free Cash Flow

= Net Cash from operating activities- Cash used for investing

= P216129.7- 500000
= (P283870.3)

** The excess of operating cash flow over basic needs is (P283870.3)

Capital Intensity ratio= Total Assets/Net Sales

= P1200354.7/1702500
= 70.5%

Fixed Assets to Total equity = Fixed assets/Total Equity

= P484225/ 1200354.7
= 40.34%
Cash Flow Margin = Cash flow for operating activities/ Net Sales
= P216129.7/1702500
= 12.69 %
Operating Profit Margin = Operating Profit/ Net Sales
= 311221/1702500
= 18.28%

Second Year of Operation

Profit Margin on Sales = Profit/Net Sales

= P379547.42/P2043000

= 18.58%
*The amount of profit by every peso of sales is 18.58%.

Rate of return on Assets = Profit/Ave. Total Assets

= P379547.42/P1379902.12
= 27.51%
*The overall profitability of assets is 27.51%.

Rate of return on Equity= Profit/Ave. Equity

= P379547.42/P1379902.12
= 27.51%
**The overall profitability of equity is 27.51%.

Capital Intensity ratio= Total Assets/Net Sales

= P1379902.12/2043000
= 67.54%
Fixed Assets to Total equity = Fixed assets/Total Equity
= P458450/1379902.12

= 33.22
Operating Profit Margin = Operating Profit/ Net Sales
= P567210.6/2043000
= 27.76%
Third Year of Operation
Profit Margin on Sales = Profit/Net Sales
= 461597.78/P2213250
= 20.86%
*The amount of profit by every peso of sales is 20.86%.

Rate of return on Assets = Profit/Ave. Total Assets

= P461597.78/P1641499.9
= 28.12%
*The overall profitability of assets is 28.12%.

Rate of return on Equity= Profit/Ave. Equity

= P461597.78/P1641499.9
=28.12%

**The overall profitability of equity is 28.12%.

Capital Intensity ratio= Total Assets/Net Sales

= P1641499.9/2213250
= 74.17%
Fixed Assets to Total equity = Fixed assets/Total Equity
= 432675/1641499.9
= 26.36%

Operating Profit Margin = Operating Profit/ Net Sales

= P563210.6/2213250
= 25.45%