Winery Cost of Goods _COGS_

Winery Cost of Goods _COGS_ - 4/24/2009 Objectives...

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4/24/2009 1 Winery Cost of Goods (COGS) April 22, 2009 Adapted from lecture by Matt Franklin Objectives What goes into “cost of goods”? Compare 3 wines: Cabernet from Central Valley, Central Coast, and Napa How to control costs Sample Income Statement Sales $100 Cost of wine sold: Grapes and wine 25 Winemaking 15 Bottling and Package 10 Gross Profi 50 Gross Profit Operating Expenses: Marketing and Sales 25 Administration 10 Operating Income (EBIT) 15 Interest 3 Taxes 5 Net Income (profit!) 7 Cost of Wine Components Package Winemaking Grapes and Wine
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4/24/2009 2 Production Timeline -------------------------------------------------------------------------------------- 01234567 Luxury wine (bare land Plant grapes Crop Produce/Aging Bottle Sell (bare land) Luxury Wine (vineyards) Premium Wine (buying grapes) Low-end wine (bulk wine) Harvest Produce/Age Bottle Sell Buy Grapes Buy and blend Bulk wine Produce and age Bottle and sell Bottle and sell Component 1: Grapes and Wine Farming costs (if winery owns vineyard and the farming operation is integrated with winery) Grape Costs (purchased Grape Costs (purchased) Bulk Wine Costs (purchased or produced) Some figures to keep in mind A ton of grapes normally yields 60 70 cases of wine 70 would be for a wine made in closed tanks with little aging—white wine bottled 6 months after little aging white wine bottled 6 months after crush 60 would be for a wine aged in barrels for 12 24 months with evaporation A case of wine is 12 bottles of 750mls or 2.376 gallons Component 1: Grapes and Wine Description Bulk wine and grapes
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This note was uploaded on 09/29/2010 for the course VEN 101C 91861 taught by Professor Davidsmart during the Spring '09 term at UC Davis.

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Winery Cost of Goods _COGS_ - 4/24/2009 Objectives...

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