ACCOUNTING AND FINANCE Assignment Example | Topics and Well Written Essays - 2750 words

ACCOUNTING AND FINANCE - Assignment Example This form of packaging was chosen because of the sterilisation process which it has to undergo. One writer states â€Å"In canning sterilization processes, the product is sealed in a metal container and then treated thermally in order to destroy all pathogenic and spoilage microorganisms. This sequence of operations does not allow recontamination of the product after thermal treatment, and, as a result, it remains shelf-stable for a long period of time.† Healthy Drinks & More is a small business and we have to ensure that our product is tamper proof. The other types of containers do not carry that assurance. The writer further states: â€Å"they can be sealed hermetically; they provide excellent protection from gases, moisture, microorganisms, rodents, and insects; they are stackable, tamper-proof, and relatively inexpensive; and, in general, they can be thermally processed.† The marginal costing statement shows the marginal cost of producing BLASS. That is, what it would cost to produce one extra can of â€Å"BLASS†. Unlike some other marginal costing statement the cost of direct material and direct labour are combined because we have outsourced the production of the drink and we were not able to receive a breakdown of the cost. The total cost of direct materials and labour is  £1 per tin. The 250 ml cans are to be sourced by us at a cost of 20p per tin (inclusive of design), for a minimum order quantity of 100,000 cans. We chose to provide the cans so that we could exercise some level of control over how they are used, while ensuring that they do not get into the wrong hands. Fixed costs relate to administration salaries, depreciation of fixed assets and rental of office space to carry out administrative functions. The breakeven table (in Appendix 2) shows information on variable cost, which is described as direct costs of