Management Accounting Assignemnt : Minute Maid Fresh Fruit
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Added on 2021-04-24
Management Accounting Assignemnt : Minute Maid Fresh Fruit
Added on 2021-04-24
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Running head: MANAGEMENT ACCOUNTING Management AccountingName of the StudentName of the UniversityAuthors NoteCourse ID
MANAGEMENT ACCOUNTING1Table of ContentsIntroduction:...............................................................................................................................3Product Description:...................................................................................................................3Major Competitors:....................................................................................................................4The Market Research:................................................................................................................5Target Market:............................................................................................................................6Revenue and Cost Assumptions:................................................................................................6Demand and Supply of Products:...............................................................................................7Supply chain Process:................................................................................................................8Credit facilities and Cash Flow Assumption:.............................................................................9Financial Assumptions:............................................................................................................10Summary:.................................................................................................................................10Breakeven Analysis:.................................................................................................................10Conclusion:..............................................................................................................................11Reference List:.........................................................................................................................12Calculations Appendix:............................................................................................................14Unit Cost Statement:................................................................................................................14Break-even in Units:................................................................................................................15Break even in Pound:...............................................................................................................16Operational Budget:.................................................................................................................18Production Budget:...................................................................................................................19Cash Flow Budget:...................................................................................................................20
MANAGEMENT ACCOUNTING2Introduction: Minute Maid Fresh Fruit will be considered as the visualization of youngentrepreneur. The business will be making contribution in the society by assisting the youthto enhance their health with the help of healthier launches. The business will be making useof the fruits produced locally by the graduates and would import the fresh grown fruits tomake a constructive use of the business process. Offering smooth juice to the customers willhelp Minute Maid Fresh Fruit to gaining a fair amount of share in the Leicester market. Thebusiness would be utilizing the fresh fruit in manufacturing juice and would be increasing itsoperations by distributing its products in the local stores. Product Description: The products of Minute Maid Fresh Fruit will be made from the local fruits whichwill not be containing any preservatives or artificial additives. The product will be free fromsugar content as the fruits would be having natural sugar (Abrams 2017). Fruits that areavailable during the specific season would be collected and would be processed in freshfruits. The major products of Minute Maid Fresh Fruit would includeFruit and vegetable juices;Fresh Fruit Smoothies;Organic orange juicesFruit and vegetable shakes.
MANAGEMENT ACCOUNTING3Figure 1: Figure reflecting fruit and fruit juices(Source: As Created by Author)Apart from the production of fruit juice there are other products that will bemanufactured will be having the content of sugars; a.Squeezed Grapefruitb.Banana Shakec.Golden Apple Juiced.Gold PineappleThe company will be categorizing the products under the heads of Relax Fit for its youngcustomers that prefer working out. Simultaneously the other category of fruit drinks willinclude the Sporty Fit which will be dedicated towards the sports team and clubs thatparticipates in sports. This will enable the business to attract customers from every quarter. Major Competitors: Tropical Smoothies and Banana Beaters are some of the major competitor that operatein the Leicester market of East Midlands of England (Scholes 2015). Market research haveprovided that both the competitors have better reputation of providing quality products. Both
MANAGEMENT ACCOUNTING4Tropical Smoothies and Banana Beaters is located in the East Midlands of England busymarket. Both the company are characterised as the purchase and go form of outlets. Minute Maid Fresh Fruit faces direct competition in the market from the localproducers that compete to offer customer with pulpy drinks (Rubin 2016). The business facesmajor competition from Tropical Smoothies since it is located close to Minute Maid FreshFruit location. The direct competition can be viewed relatively medium as there are no otherfruit juice producers that offer customers with fresh fruit juice and no content of sugar. The other competitor Banana Beaters is known for their traditional juices withTropical Smoothies operating in the market for several years and no real sign of growing itsbusiness soon. Fortunately, other fruit juice manufacturer located in the far East Midlandsfaces financial shortages and this may assist the proposed business in stimulating demand forfresh fruit juices. The Market Research: The market research suggest that the industry of fruit juice has experienced rise in2016 and recorded a growth of 7% in the off-trade values sales with 6% rise in off-tradesales. The expansion of fruit juice industry is primarily because of the rise in premium trendespecially packed bottle of pulpy fruit and vegetable juice, sugar content preservative drinksand carbonated content juice (Cassidy 2016). New market entrant of carbonated fruit juicebrands without the preservatives are some of the popular launches and drinks having Asianspeciality are on declining trend. The per unit price of reconstituted fruit juice bottles costs around £4.50 per litre whilethe price per unit of peel fresh nectars brands of fruit juice costs around £4.30 per litre.Presumably recent market trends suggest a demand for health drinks with majority of theconsumers have expressed their preference of sharing goodness with their family. Over their
MANAGEMENT ACCOUNTING5forecasted time period the consumers would look for wide range of healthy fruit drinks thatare free from sugar and preservatives. Target Market: With more than 1.5 million population of Leicester the target market for Minute MaidFresh Fruit is visibly large. Nevertheless, the business will be targeting customers from allage group but a special focus will be placed on younger and health conscious customers. Thetarget market will mainly comprise of creating an appeal for its products among the youthgenerations that are engaged in sports and value their health (Morecroft 2015). The targetmarket opportunity is based on prioritizing and personalizing the packaging for achieving theobjective of better standard of living. Revenue and Cost Assumptions: The breakeven of the sales was computed at £1,00,591 over the one year forecastedperiod. Because of the margin of contribution ratio, the prices of the products are determinedbased on the bulk purchasing of the products. The projected quantity to be sold is determinedbased on the market survey of how often the consumers purchase the juice item. The marketsurvey reveals that 10% of the customers purchase an additional item with their smoothies(Wheelen et al. 2017). The sales computation is based on the assumption that 11 % of thesales are generated from the purchase of fruit and vegetable juices from the first year were as14 % of the sales revenue are generated from the super food drinks in the initial year ofoperation. Moreover, the strategy employed is low cost option that is envisioned to diversify thecompany overall revenues and simultaneously offering customers with the necessarynutrients (Slack 2015). The average cost per batch is anticipated to be around £94.50. As aresult of this, the contribution margin stands 78.5%. This strategy is regarded as one of the
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