Business Plan Report: Energy Chocolate Bar Financial Analysis

This report presents a business plan for manufacturing an energy chocolate bar. It begins with an introduction to the product, its target market (children and youth), and the competitive landscape, including major players like Hershey and Nestlé. The report details the costs involved, including initial and ongoing investments, raw materials, and manufacturing expenses. It explores the pricing strategy, aiming for a 20% profit margin, and provides a break-even analysis in units and dollars. The report includes calculations for fixed and variable costs, contribution margin, and sales figures needed to achieve a desired operating income. The analysis is grounded in financial concepts relevant to managerial accounting, such as cost-volume-profit analysis. References to industry articles and statistical data support the business plan's viability and market understanding.

Business Plan

FINANCE 1
Introduction
Energy Chocolate Bar is the product for manufacturing. Energy chocolate bar contains
the nutrients and protein ingredients that boast the energy. Chocolate industry is growing
continuously in every year which is the reason of manufacturing the chocolate bar as a product.
Hershey Company, Nestlé Group, and Lindt & Sprüngli are the competitor companies of the
energy chocolate bar. It target children and youth are the target customers of the product.
According to the statistical article, it has been determined that industry is growing yearly which
is beneficial for the organization of chocolate to operate the business. The subject matter of
chocolate industry is the trade value of chocolate products (Statista, 2019).
Costs
1. Financial budget, ingredients as raw material, fixed assets such as manufacturing
machines are the requirement to make the product. Production will be the capital
intensive as it mainly focuses on machine work instead of labor work. Product
differentiation strategy will adopt to gain the competitive advantage (Step Toward
Business, 2019).
2. Company has to invest the high amount in manufacturing of chocolate bar. Machine cost,
labor wages, raw material and many others are the expenses which states the
manufacturing cost of the product. The product invests $1000000 at the initial investment
and $9000000 in the one year.
3. Product contains the period costs which mean it has selling cost and administrative cost.
Selling and administrative cost of the chocolate product per unit is 6.40. Further, the
company contains the mixed cost for manufacturing the chocolate as it has fixed and

FINANCE 2
variable costs. Fixed cost defines the cost which cannot be fluctuated and the variable
cost defines the cost that has been fluctuated. The fixed cost of the product is 9.60 and the
variable costs are 6.40 per unit which means the total costs is 14 per unit (Dixon, 2019).
4. The cost per unit of chocolate is 16 as it contains prime cost-7.25, factor expenses- 9.60,
office and administration cost-14, selling and distribution cost- 2.
Price
5. Chocolate manufacturing cost is 16 and it sells the product in 20 which it earns the 20%
of net profit from one unit. The price of selling product is high as compare to the cost of
product so that it can gain 20% of profit in a unit. The main motive of the company to
manufacture the product is to earn the revenue due to which the net profit margin is high.
Other Questions
Break Even Sales in Units
Break Even Point in
Unit Fixed cost 700,000
Contribution per unit 14 50000
Contribution per unit Selling Price Per Unit 20
Less: Variable cost per unit 6
Contribution per unit 14
Break Even Sales in Dollars
Break Even Point in
dollars Fixed cost 700,000
Contribution percentage 70.00%
$
1,000,000.00

FINANCE 3
Contribution percentage Contribution per unit 14
Selling Price Per Unit 20 70.00%
The sales in units with $500000 of operating income
Sales
Fixed expenses+ Desired
Profit
700000+50000
0
Contribution Margin 70% 1714285.714

FINANCE 4
References
Dixon, R. (2019). The Cost of Making Chocolate. Retrieved From:
https://www.leaf.tv/articles/what-are-the-ingredients-in-chocolate/
Statista. (2019). Chocolate in Canada- Statistics & Facts. Retrieved From:
https://www.statista.com/topics/4061/chocolate-in-canada/
Step Toward Business. (2019). Chocolate Making Business | Business Plan with Profit Margin.
Retrieved From: https://www.steptowardbusiness.com/chocolate-making-business-profit/