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    The document summarizes the yearly costs of bottling operations at Cremeore Springs Brewery. It details that the total yearly costs for sending bottles to a third party cleaner is $147,000. Running the bottling line in-house would require investing $1.5 million in new equipment but would save $148,000 per year and payback the initial investment within 10 years, while also providing $22,500 in annual tax deductions from depreciation.

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    The document summarizes the yearly costs of bottling operations at Cremeore Springs Brewery. It details that the total yearly costs for sending bottles to a third party cleaner is $147,000. Running the bottling line in-house would require investing $1.5 million in new equipment but would save $148,000 per year and payback the initial investment within 10 years, while also providing $22,500 in annual tax deductions from depreciation.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    Download as xlsx, pdf, or txt
    51 views3 pages

    Cree More

    Uploaded by

    JC Alfonso
    The document summarizes the yearly costs of bottling operations at Cremeore Springs Brewery. It details that the total yearly costs for sending bottles to a third party cleaner is $147,000. Running the bottling line in-house would require investing $1.5 million in new equipment but would save $148,000 per year and payback the initial investment within 10 years, while also providing $22,500 in annual tax deductions from depreciation.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 3

    BOTTLING AT CREEMORE SPRINGS BREWERY

    Demand bottles 2,200,000.00


    Reused bottles percentage 0.75
    Bottles sent to third party cleaner 1,650,000.00
    Cost of cleaning per bottle 0.08
    Payment for bottle cleaning 132,000.00

    Shipping cost to third party 15,000.00

    TOTAL YEARLY COSTS FOR THIRD PARTY CLEANING 147,000.00


    BOTTLING AT CREEMORE SPRINGS BREWERY

    Breakage 1,000.00

    New equipment (estimated 20yrs useful life) 1,500,000.00

    Contract line worker wage per hour 18.75


    2.00
    2 Contract line worker wage per hour 37.50 75,000.00
    Running hours per year 460.00 2,200,000.00
    Total worker wage per year 17,250.00
    0.0340909091

    Water per hour 2.15


    Electricity per hour 2.33
    Gas per hour 4.60
    Resources per hour 9.08
    Running hours per year 460.00
    Total resources per year 4,176.80

    Wastewater effluent per cubic meter 6.00


    Cubic meter per hour 2.00
    Wastewater effluent cost per hour 12.00
    Running hours per year 460.00
    Total wastewater cost per year 5,520.00

    Variable cost 26,946.80


    Units 1,650,000.00
    VC per unit 0.02

    Fixed Cost 75,000.00


    Units 1,650,000.00
    FC per unit 0.05
    BOTTLING AT CREEMORE SPRINGS BREWERY

    Annual incremental savings 148,000.00


    Net cost of initial investment 1,526,946.80

    Payback period of new quipment 10.32

    Yearly tax shield due to depreciation (assumpotion of 30% tax) 22,500.00

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