Azienda Vinicola Italiana Case

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BACKGROUND OF THE STUDY Azienda Vinicola Italiana produced and bottled wines. The company did not buy grapes but rather bought either mosto or bulk wine. They have seen that this policy had the disadvantage that the firm could not assure itself of a consistently high-quality product. Moreover, the administrative manager wished to re-organize the firm in order to exploit its productive capacity to the utmost and, above all, to increase the net profit, which the owners did not consider satisfactory. The administrative manager assumed a maximum capacity of 900,000 bottles a year which would be equivalent to Lit 1,980 million. The administrative manager decided, therefore, to try to discover a way to change costs and revenue so as to obtain…show more content…
ibution Margin 934.59 841,134,000.00 Less: Fixed Costs Labor Cost 142,854,000.00 Staff Salaries 118,196,000.00 General Manufacturing Expenses 52,744,000.00 General Administrative Expenses 66,000,000.00 Advertising Expense 86,900,000.00 Interest 82,500,000.00 Depreciation 115,940,000.00 665,134,000.00 Net Income 176,000.00 Contribution Margin Ratio(Contribution Margin/Sales) 40.24% BEP Sales 711,682.80 BEP in Lire 1,652,907,024.94 ACA 2: Assumes that fixed cost decrease AZIENDA VINICOLA ITALIANA Income Statement (Contribution Margin Approach) For the Year xxxx Production Capacity - 900,000 Unit Cost In Lire SALES 2,200.00 1,980,000,000.00 Less: Variable Costs Labor Cost 245.78 221,202,000.00 Raw Materials 690.8 621,720,000.00 Axiliary Materials 451.36 406,224,000.00 1,249,146,000.00 Contribution Margin 812.06 730,854,000.00 Less: Fixed Costs Labor Cost 119,168,638.67 Staff Salaries 98,598,964.09 General Manufacturing Expenses 43,998,982.73 General Administrative Expenses 55,057,122.32 Advertising Expense 72,491,877.73 Interest 68,821,402.91 Depreciation 96,717,011.55 554,854,000.00 Net Income 176,000,000.00 Contribution Margin Ratio 36.91% BEP in

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