Berry chocolate Sdn Bhd was created with one single target- brilliance. Our focus is aimed to produce the best chocolates for both the global and local markets. Our first factory which is located in Cheras, Kuala Lumpur, was build up in 2020. Berry chocolate Sdn Bhd begun out with fabricating purchaser-packed chocolates that were sold basically to duty-free retail stores and supermarkets over the nation. In this year 2021, we moved to our modern manufacturing factory which is located in Old Klang Road Industrial park where we get larger our production lines to supply a various range of chocolate items to satisfy our guarantee to provide them high quality chocolates to our clients. In last month, we opened one more production line to maintain our growing demands from our clients and to evolve new items that our clients would love. The new production line helped us to provide fairer consumer-packed chocolate. Berry Sdn Bhd presently moreover create chocolate for the nourishment benefit business and manufacture other cookies items(Beryl's, n.d.). Our mission is that we are energetic approximately the craftmanship of chocolate-making and we will be striving to produce premium chocolate which will definitely attract more customers. We are going to utilized nothing but the best quality fixings and execute strict operational methods to guarantee that produce the perfect chocolates. Apart from that, our vision for future is to target with a leading international chocolatier that underscores on fabulousness and excellence by making the best and the foremost indulgent chocolates with our soul of advancement and improvement(Beryl's, n.d.). We are pleased to give the best quality of chocolate to our customer and put a smile on the face of our customers.

Raw materials can be defined as the elementary material from where a product is made. Berry Chocolate Sdn Bhd plays role as chocolate manufacturer, the main materials that are used to produce chocolates are cocoa mass, cocoa butter, sugar and milk. Cocoa mass is the pure cocoa that is made from whole roasted beans and precisely pounded into smooth and homogeneous liquor. Cocoa mass also performs as the soul of chocolate as it able to attain concentrated cocoa taste and dimmer colour for flavouring. Other than that, cocoa butter is a must in producing chocolates especially when manufacturing chocolate bars and chocolate chips. Cocoa butter is a form of fat that originates from cocoa beans which generated through roasted, exposed and constrained to detached out the fat. Meanwhile, cocoa butter is rich in fatty acids that help in hydrating, nourishing and improve elasticity toward the skin to form a defensive barrier over skin in order to hold moisture. As a chocolate manufacturer, sugars are the most important element in chocolate production whereas sugars are carbohydrate that produce energy for the body. The main sugars that are used in creating chocolates are fructose, glucose and sucrose. Fructose is the sugar originate in fruits and glucose is the priority type of sugar in the blood while sucrose is the common sugar that formed naturally from plants. Furthermore, Berry Chocolate Sdn Bhd used milk to manufacture milk chocolates as milk able to provide creamy texture towards the chocolate. Milk contains lots of nutrient such as calcium, magnesium, vitamin B, potassium, vitamin D and phosphorus which produced by young mammals. Milk chocolates also lead to some benefits, for example, bone health, muscle mass, muscle endurance, and weight management.

Berry Chocolate Sdn Bhd has formed a target whereby the company aimed to achieve an output of 100,000 units. In order to generate 100,000 units of chocolates, the raw materials used to produce chocolates are shown as below:

Cocoa mass RM 500,000

Cocoa butter RM 150,000

Sugar RM 100,000

Milk RM 200,000

The formula, raw material divided by expected output have been used to calculate the cost of raw material per unit. Hence, the cost of raw material per unit has calculated as shown below:

Cocoa mass = RM 500,000 / 100,000 units = RM 5.00 per unit

Cocoa butter = RM 150,000 / 100,000 units = RM 1.50 per unit

Sugar = RM 100,000 / 100,000 units = RM 1.00 per unit

Milk = RM 200,000 / 100,000 units = RM 2.00 per unit

The total cost of raw material is RM 9.50 per unit in order to produce 100,000 units of chocolate for Berry Chocolate Sdn Bhd.

Berry Chocolate Sdn Bhd has go through the process of blending, rolling, conching, tempering and moulding in order to generate chocolates. The machines used in Berry Chocolate Sdn Bhd have included mixer, roller, concher, baker, and moulder. The direct labour expenses in order to achieve an output of 100,000 has shown as below:

Mixer 100 hours RM 500,000

Roller 70 hours RM 500,000

Concher 30 hours RM 20,000

Baker 50 hours RM 100,000

Moulder 20 hours RM 80,000

The formula whereas labour cost divided by expected output is used to calculate the labour cost per unit in Berry Chocolate Sdn Bhd. The labour cost per unit has considered as shown below:

Mixer = RM 500,000 / 100,000 units = RM 5.00 per unit

Roller = RM 500,000 / 100,000 units = RM 5.00 per unit

Concher = RM20,000 / 100,000 units = RM 0.20 per unit

Baker = RM 100,000 / 100,000 units = RM 1.00 per unit

Moulder = RM80,000 / 100,000 units = RM 0.80 per unit

The total labour cost is RM 12 per unit in order to produce 100,000 units of chocolate for Berry Chocolate Sdn Bhd.

Overhead cost can be well-defined as the expenses occurred in the business without generating revenue. There are two types of overhead costing that comprised of fixed overheads and variable overheads. Overhead cost per unit can be calculated through overhead costs divided by expected output. The overhead cost in order to process 100,000 units of chocolate for Berry Chocolate Sdn Bhd has shown as below:

PARTICULARS TOTAL COST (RM) COST PER UNIT ( RM)

Fixed Overhead Cost

Depreciation on plant and machinery 150000 1.50

Rental 50000 0.50

Insurance 60000 0.60

Supervisor's Salary 40000 0.40

Total Fixed Overhead Cost 300,000 3.00

Variable Overhead Cost

Electricity 30000 0.30

Power & Consumable Stores 50000 0.50

Running Expenses of Machine 120000 1.20

Total Variable Overhead Cost 200,000 2.00

Total Overhead Cost 500,000 5.00

Hence, the total overhead cost of Berry Chocolate Sdn Bhd to produce 100,000 units of chocolate cost RM 5.00 per unit.

As Berry Chocolate Sdn Bhd intended to produce 100,000 units of chocolate, the total cost of raw materials cost RM 9.50 per unit, labour cost RM 12 per unit and overhead cost RM 5.00 per unit. The total cost is RM 26.50 in order to generate a chocolate.

Question

Show a forecasted calculation of one of the product cost by using the method. (i.e. target selling price - targeted revenue minus total cost)