A Votre Sante Teaching Note Essay

Addition in ally, the case questions require both quantitative and qualitative analyses of the business issues faced by AVS. AVS has been apply in a graduate-level managerial accounting class for MBAs, and would be most appropriate for an advanced undergrad or a graduate-level accounting or MBA course.The detail in the case is rich enough to take a variety of analyses. Alternative uses could be to have the student construct a cost of goods manufacture statement or a traditional financial statement, both of which reinforce the differences between product and diaphragm cost. Additionally, alternative decision analysis questions could be developed using the variable and fixed cost structures set forth in the case. Case question number two is only one example of a effectiveness decision analysis question.The contribution margin income statement (Teaching Note debunk 1) is fairly straightforward, with the following concepts or calculations causing the most difficultyThe inclusion o f liquor taxes and sales commissions in variable costs These are both period expenses, but are clearly based upon the number of bottles sold, and therefore are include in the variable costs.Where to include the wine master expense Since the wine master is paid correspond to number of blends, not number of bottles, this expense is listed as a fixed cost. Arguably, it could be listed as a variable cost, given thatthe cost will be based on the number of wines produced. As helping of the discussion we will examine the rationale behind listing wine master as a fixed or a variable expense.Barrel expense The case states that the barrels produce the kindred of 40 cases of wine. A case of wine is post-fermentation/bottling and therefore after the 10% loss has occurred. The barrels have got the wine at the start of the process. Therefore, there have to be enough barrels to hold all the wine at the beginning of the process, not at the end. This factor conduces in 63 (62.5) barrels world required for the harvest2.Teaching Note Exhibit 1 Contribution Margin Income StatementPart b asks, What is the maximum amount that AVS would pay to buy an additional pound of chardonnay grape grapes? There are deuce-ace parts to calculating this answer the benefit from the additional Chardonnay wine to be sold, the relevant costs related to producing this wine and the opportunity cost of not producing as much Blanc de Blanc wine.Teaching Note Exhibit 2 displays the calculations relevant to this decision. Chardonnay regular wine requires a 2 to 1 mixture of Chardonnay and generic white grapes. Therefore, the 18,000 pounds of Chardonnay grapes will be combined with 9,000 pounds of generic white grapes.The 27,000 pounds of grapes will response in an additional 9,000 bottles of new Chardonnay regular 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 forthwith be used for the Char donnay-regular wine. Recall that only Chardonnay wine is processed in barrels.