TECHNICAL STUDY

INTRODUCTION

This chapter contains the planning and checking in advance how the business will
perform in its day-to-day operation

A. THE PRODUCT
Leche Flan is a dessert made from eggs and milk with soft caramel on top. The
researchers decided to add some flavor to the said dessert and came up with an idea of using
Baguios famous strawberries in preparing such.

Manufacturing Process

Careful selection of raw materials was made to ensure the cleanliness and quality of the
products to be made. By following the amount of ingredients listed below, 288 units of Berry
Flantastic (128 llanera-sized and 160 solo serving) are expected to be produced on a normal
operating day. This is equivalent to 38,400 grams of Berry Flantastic. This production is
expected to be achieved on average over a number of periods or seasons under normal
circumstances, taking into account the loss of capacity resulting from planned maintenance and
fortuitous events.

I. Process in Making the Leche Flan

Step 1. Prepare all the ingredients. (10 minutes)
The following are needed to produce 288 units of Berry Flantastic
Condensed milk 15 (300ml)
Evaporated milk 15 (365ml)
Large-sized eggs 10 18 dozens (56g)
Strawberries 4.5 kg
Food coloring 15 ml
Food Flavoring 22.5 ml
White sugar 9 kg
Water 2400 ml

Step 2. Slice the strawberries. (15 minutes)

Wash the strawberries before slicing and then remove the leaves and stem. After
slicing the strawberries into small pieces, put it in a bowl.

Step 3. Beat the eggs. (5 minutes)

Crack the eggs and place it in another bowl. Carefully separate the yolk from the egg
white and beat them using a fork, egg beater or mixer.

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 Step 4. Mix all the liquid ingredients. (15 minutes)
In a big bowl or container, pour the condensed milk and the evaporated milk. After
thoroughly mixing the milk, add the eggs and sugar while constantly mixing the
ingredients. Enhance the taste and color of the mixture by adding the food color and
food flavor. Strain the mixture 3-5 times or until it smoothened. The straining would
help remove the residue on the mixture (eggs shells).

Step 5. Set the steamer. (15 minutes)

Put full of water on the steamer and wait until it boils.

Step 6. Steam the Mixture (40 minutes to 1 hour)

While waiting for the steamer, pour strawberry jam syrup into the container (two
spoonful for solo sized container and five spoonful for llanera) and add the leche flan
mixture. Steam the flan for the same time period. Check the flan every after 15
minutes to make sure that is already cooked or until toothpick inserted in the middle
of custard come out clean. A layer of a steamer can cook 20 solo-serving or 8 llanera-
sized Berry Flantastic.

Step 7. Packaging of Leche Flan (20 minutes)

Using a cling wrap, put a wooden spoon on top of the container and then cover.

Step 8. Cool and Refrigerate the Flan (Overnight)

Remove the flan containers from the oven or steamer and allow cooling and
refrigerating to set. To serve, turn flan over on a serving plate, ending with strawberry
jam syrup on top. Place strawberries on top of the flan to enhance the appearance.
The strawberries from the jam could be used.

II. Process in Making the Strawberry Jam (10 mins)

Step 1. Prepare all the ingredients needed.
While heating the pan to be used, the necessary ingredients must be provided.

Water 3 liters
Sliced Strawberries 4.5 kilograms
Sugar 1125 grams

Step 2. Cook the ingredients. (45 mins)

In a heavy bottomed saucepan, mix together the strawberries, sugar and water. Stir
over low heat until the sugar is dissolved. Increase heat to high, and bring the mixture
to a full rolling boil. Boil, stirring often, until the mixture reaches the thick texture.

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Step 3. Strain the strawberry jam. (10 mins)
Let the strawberry jam to cool before strain. Once the strawberry is ready, you can
use a filter to get the syrup of the jam.

Manufacturing Process Flow Chart

Production Process in Making Berry Flantastic

Preparation of Raw Materials (10 minutes)

Washing and Slicing of strawberries (15 minutes)

Cooking the Jam (45 minutes)

Beating (5 minutes)

Straining (4 minutes)

Mixing (15 minutes)

Setting the steamer (15 minutes)

Steaming/Baking (45 minutes to 1 hour)

Packaging (20 minutes)

Cooling (overnight)

Berry Flantastic

Figure 1. Manufacturing Process

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Distribution Process
Distribution Process
The distribution of the products would be an everyday process - from Monday to Friday.
The products made on a day will be delivered for consignment the next day. However,
following a five-day work week, products made on a Friday will be delivered by Monday.
Consignees will be receiving the goods at least once a week, unless they run out of stock and
wish to have more delivered to them. This means that at different days of the week, different
consignees will be accommodated. This is to take into consideration the daily production
capacity of the company.

This process starts with the packaging of the goods for delivery. The worker will take
about another 3 minutes to pack the ordered flans by placing it in a clean carton box or plastic
bag. After the packaging, the worker will now deliver the consigned products to the consignee
and will take the payment (collections) of the sales from previously delivered consigned goods,
and give the change, if there are any. Items that remained unsold for a week and spoiled items
will also be collected and properly disposed. Leche flan has a shelf life of 2-3 weeks if kept in
a refrigerator. Strawberries, however, have a shorter shelf life thus the researchers decided to
estimate the shelf life of Berry Flantastic at a maximum of one week. The worker is expected
to finish these within 30 minutes to 1 hour.

In cases wherein consignees wish to order more of the product, they are allowed to
contact the company through call, messaging or personal contact. Included in this process will
be the greeting of the customer. In order to avoid any confusion, the worker will have to restate
the order to verify. After taking the order, the worker will then check the stock if there is
enough number of leche flan available and then the worker will confirm that the order has been
recorded. The worker will take 3 minutes to do this task. After these steps, the worker will then
proceed to the normal process of delivering the goods as stated above.

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 Distribution Process Flowchart per Order of Berry Flantastic

Taking the order of consignee (1 minute)

Verify Stocks and Confirming of Order (3 minutes)

Packaging of the Product (3 minutes)

Delivery (30 minutes-50 minutes)

Taking collections from previous consignment and unsold

items (5 minutes)

Figure 2. Distribution Process

B. PLANT SIZE AND PRODUCTION SCHEDULE

The production site will run from Monday to Friday for 8 hours a day from 8:00 in the
morning to 5:00 in the afternoon with a lunch break of one hour, from 12:00 noon to 1:00 in
the afternoon. Each production cycle produces 288 units of Berry Flantastic (128 llanera-sized
and 160 solo serving). The product made will be delivered to distributors in different sari-sari
stores and canteen on consignment. In a year, the business will operate as follows:

Solo Llanera Total

Units per batch 40 32 72
Multiply by: Batches per day 4 4 4
Total daily production, units 160 128 416
Multiply by: No. of Working days in a year 256 256 256
Total annual production, units 40,960 32,768 10,6496
Multiply by: grams per unit 80 200
Total annual production, grams 3,276,800 6,553,600 3,276,800

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 C. MACHINERY AND EQUIPMENT
STAINLESS STEEL STEAMER

BRAND: AAA
QUANTITY: 2
UNIT PRICE: 2,109.00
TOTAL COST: 4,218.00
SUPPLIER:TIONGSAN HARRISON

GAS TANK WITH REFILL

Brand: SOLANE
QUANTITY: 3
UNIT PRICE: PHP 2,020.00
WEIGHT: 11 KG
TOTAL COST: 6,060.00
SUPPLIER: WIN LPG DELIVERY

GAS STOVE
BRAND: DOWELL
SPECIFICATIONS: DOUBLE BURNER
QUANTITY: 2
UNIT PRICE: 819.00
TOTAL COST: 1,638.00
SUPPLIER:TIONGSAN HARRISON

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REFRIDGERATOR

BRAND: SAMSUNG RT35K5532SL

SPECIFICATIONS: TWIN COOLING
PLUS; SMART CONVERSION
QUANTITY: 1
UNIT PRICE: 28,896.00
TOTAL COST: 28,896.00
SUPPLIER:TIONGSAN HARRISON

GAS STOVE PRESSURE REGULATOR

QUANTITY: 1
UNIT PRICE: 320.00
TOTAL COST: 320.00
SUPPLIER:TIONGSAN HARRISON

LAPTOP
BRAND: DELL INSPIRON 3552
SPECIFICATIONS: 15.6; CELERON
N3050; 4 GB RAM; 500 GB HDD
QUANTITY: 1
UNIT PRICE: 14710.00
TOTAL COST: 14710.00
SUPPLIER:TIONGSAN HARRISON

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MOTORCYCLE

BRAND: SUZUKI
QUANTITY: 1
UNIT PRICE: 47,900.00
TOTAL COST: 47,900.00

D. PLANT LOCATION
Berry Flantastics production site will be located at 55 T. Alonzo St., Baguio City with a
space of 6mx4m in area.

Figure 3. Vicinity Map of Production Site

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 E. PLANT LAYOUT
The plant layout is designed to correspond to an efficient production process of the
employees. The working table is parallel to the cooking and washing areas for a smooth process
in preparing the needed ingredients and cooking the product. The refrigerator is placed between
the washing and packaging area for an organized preparation of ingredients and so that finished
products would go straight to the cooler.

Figure 4. Plant Layout

F. RAW MATERIALS AND SUPPLIES

The following are the materials needed for the daily production of Berry Flantastic.
a.) Direct Raw Materials
INGREDIENTS QUANTITY UNIT COST TOTAL
Evaporated milk 300 ml (15) 26.90/300 ml 394.50
Condensed milk 300 ml (15) 49.90/300 ml 739.50
Eggs 10 18 Dozens 72.00/dozen 729.00
White sugar 10.125 kg 50.00/kg 506.25
Strawberries 9 kg 150.00/kg 1350.00
Food flavouring 15 ml 1.00/ml (P475/475 ml) 15.00
Red food coloring 22.5 ml .50/ml (P217/475 ml) 11.25
Water 5400 ml P25.00/1000ml 135.00
Total daily production 3,889.50

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b.) Packaging Materials
i. Solo
ITEMS QUANTITY UNIT COST TOTAL
Plastic cups (50/pack) 4 35/pack 140.00
Wooden spoons
16 15/pack 240.00
(10/pack)
Plastic Wrapper 2 54 108.00
Total 488.00

ii. Llanera
ITEMS QUANTITY UNIT COST TOTAL
Styrofoam (10/pack) 13 14.50/pack 188.50
Plastic Wrapper 3 54 162.00
Total 350.50

c.) Production Supplies

ITEMS QUANTITY UNIT COST TOTAL
Hair Nets 3 10.00 30.00
Pot Holder 6 5.00 30.00
Gloves (100pcs) 2 75 150.00
Apron 3 41.50 124.50
Total 334.50

d.) Tools and Implements

ITEMS QUANTITY UNIT COST TOTAL
Mixing basin 2 255.75 511.50
Knife 1 75.00 75.00

Chopping board 1 259.00 259.00

Tongs 1 35.00 35.00

Steel Spatula 1 39.00 39.00

Wooden Spatula 1 29.00 29.00

Container 3 39.00 117.00

Strainer 1 30.00 30.00

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 Mixer 1 81.75 81.75

Measuring Cups set 1 72.50 72.50

Weighing scale 1 279.29 279.29

Flan molder 600 5.00 3000.00

Llanera pan 16 15.00 31.00

Total 4560.04

e.) Cleaning Supplies & Materials

QUANTITY UNIT COST TOTAL
Dishwashing Liquid 6L 65.00 390.00
Hand Soap 3L 18.00 54.00
Sponge 4 30.00 120.00
Soft Broom 1 100.00 100.00
Dust Pan 1 75.00 75.00
Foot Rug 4 20.00 80.00
Mop 1 306.25 306.25
Trash Bin 2 25.00 25.00
Trash Bag 4 packs 57.00 228.00
Scrub Sponge 2 23.75 47.50
Soap Container 1 28.75 28.75
Total 1,479.50

f.) Office Supplies

QUANTITY UNIT COST TOTAL
Calculator 1 220.00 220.00
Record Notebook 4 17.00 68.00
Official Receipt 4 Booklets 100.00 400.00
Ballpen 10 7.00 70.00
Cellphone 1 800.00 800.00
Printer 1 4,200.00 4,200.00
Laptop 1 14,710.00 14,710.00
Cash Box 1 450.00 450.00
Total 20,918.00

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 G. UTILITIES
The electricity and the water consumption is inclusive on the payment for the monthly
rent which is 2,833.75 per month.

1. Water
In washing the raw materials and tools that will be used in the production as well as
maintaining cleanliness of the production area, water is highly needed. The water that will be
used by the enterprise will be provided by Baguio Water District (BAWADI).
Cubic Meter Used 3
Multiply by: Monthly Rate 40.50
Total Monthly Bill 121.50

2. Electricity
The electricity will be utilized for the lighting of the production area and to run the
refrigerator. Benguet Electrical Cooperative (BENECO) will supply the business for its needed
electricity.

LED Bulb ( 9W)

Light Bulb Watts 9
Multiply by: Hours Used 8
Number of bulbs 3
Days 22
Total 4752
Divided By: Kilowatt hour (kWh) 1,000.00
Total kilowatt hour 4.752
Multiply by: Rate per kWh (inclusive of VAT) 6.79
Total Light bulb Bill 32.27

Refrigerator (180 W)

Refrigerator Watts 180

Multiply by: Hours Used 24
Multiply By: Days 30
Total 129,600.00
Divided By: kWh 1,000.00
Total kWh 129.6

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 Multiply by: Rate per kWh (inclusive of VAT) 6.79
Total Refrigerator Bill 879.98

3. Gas Refill
The enterprise will use 3 tanks of Solane per month for their production.
LPG Expense per Month (P 600.00 x 3) Php 1800.00
H. WASTE DISPOSAL
Every business must practice good ethics for the welfare of the environment. In line with
this, the business of Berry Flantastic will practice good waste management. Proper segregation
of wastes will be implemented. The business will use two trash bins. One for biodegradable
wastes and the other is for non-biodegradable wastes.

I. PRODUCTION COST
This section will show how much is the daily production cost. It is the summary of the
cost needed for the production.

Total Solo (160 units) Llanera (128 units)

Number of grams to be produced 38,400 12,800 25,600

Direct Raw Materials (Note 1) 3,889.50 1,296.50 2,593.00
Packaging Materials (Note 2) 838.50 488.00 350.50
Direct Labor (Note 3) 1025.21 341.74 683.47
Rent Expense (Note 4) 227.27 75.76 151.52
Utilities Expense (Note 5) 101.52 33.84 67.68
Total Cost 6,082.00 2,235.83 3,846.17
Divided by: Units Produced 160 128
Production Cost per unit 13.97 30.05

Mark-up: 45% 6.29 13.52

Selling Price per Unit 20.26 43.57

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Note 1: Direct Raw Materials
INGREDIENTS QUANTITY UNIT COST TOTAL
Evaporated milk 300 ml (15) 26.90/300 ml 394.50
Condensed milk 300 ml (15) 49.90/300 ml 739.50
Eggs 10 18 Dozens 72.00/dozen 729.00
White sugar 10.125 kg 50.00/kg 506.25
Strawberries 9 kg 150.00/kg 1350.00
Food flavouring 15 ml 1.00/ml (P475/475 ml) 15.00
Red food coloring 22.5 ml .50/ml (P217/475 ml) 11.25
Water 5400 ml P25.00/1000ml 135.00
Total daily production 3880.50

Note 2: Packaging Materials

i. Solo
ITEMS QUANTITY UNIT COST TOTAL
Plastic cups (50/pack) 4 35/pack 140.00
Wooden spoons (10/pack) 16 15/pack 240.00
Plastic Wrapper 2 54 108.00
Total 488.00
ii. Llanera
ITEMS QUANTITY UNIT COST TOTAL
Styrofoam (10/pack) 13 14.50/pack 188.50
Plastic Wrapper 3 54 162.00
Total 350.50

Note 3: Direct Labor

Daily Salary of Production Worker (minimum wage

308.75
+ 13th month pay)
Multiply by: No. of worker 3.00
Daily Salary of Production Workers 926.25
Employee Benefits:
SSS Contribution 525.70
PhilHealth 100.00
PAG-IBIG 100.00
Total Monthly Benefits per Worker 725.70
Multiply by: Number of Workers 3.00
Total Monthly Employee Benefits 2,177.10
Divide by: No. of Operating Days in a Month 22 98.96
Direct Labor- daily 1,025.21

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Note 4: Rent Expense
Total Monthly Rent 5,000.00
Divided by: Number of Operating Days in a Month 22
Daily Rent Expense 227.27

Note 5: Utilities Expense

Water ( 121.5/22 days) 5.52
LPG ( 200/22 days) 54.54
Electricity ( 912.25/22 days) 41.46
Daily Utilities Expense 101.52

Project Cost Monthly (22 work days)

Items Note
Machinery & Equipment 1 86,104.00
Raw Materials 2 85,767.00
Packaging Materials 3 18,447.00
Production Supplies 4 334.50
Tools and Implements 5 4,529.04
Cleaning Supplies and Materials 6 1,454.50
Office supplies 7 20,918.00
Other Supplies and Implements 8 2,949.75
Rent Expense 9 10,000.00
Salaries of employees 10 22,554.64
Advertising Expense 11 4,350.00
Taxes and Licenses 12 5,050.60
Utilities Expense 13 2,833.75
Feasibility Cost 14 1,950.00
Delivery Expense 15 1,488.00
Total Project Cost 268,755.74

Note 1: Machinery & Equipment

Items Unit Cost Quantity Amount
Stainless Steel Steamer 2,109.00 1 2,109.00
Gas Tank with Refill 2,020.00 3 6,060.00
Refrigerator 28,896.00 1 28,896.00
Gas Stove 819.00 1 819.00

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 Gas stove pressure regulator 320.00 1 320.00
Motorcycle 47,900.00 1 47,900.00
Total Cost 86,104.00

Note 2: Raw Materials

Items Quantity Unit Cost Amount

Evaporated milk 300 ml (330) 26.90/300 ml 8,877.00
Condensed milk 300 ml (330) 49.90/300 ml 16, 467.00
Eggs 222.75 Dozens 72.00/dozen 16,038.00
White sugar 222.75 kg 50.00/kg 11,137.50
Strawberries 198 kg 150.00/kg 29,700.00
1.00/ml
Food flavouring 330 ml 330.00
(P475/475 ml)
.50/ml
Red food coloring 495 ml 247.50
(P217/475 ml)
Water 118800ml 25.00/1000ml 2,970.00
Total Raw materials cost 85,767.00

Note 3: Packaging Materials

i. Solo

Items Quantity Unit Cost Amount

Plastic cups (50/pack) 88 35/pack 3,080.00
Wooden spoons (10/pack) 352 15/pack 5,280.00
Plastic Wrapper 44 54 2,376.00
Total 10,736
iii. Llanera
Items Quantity Unit Cost Amount
Styrofoam (10/pack) 286 14.50/pack 4,147.00
Plastic Wrapper 66 54 3,564.00
Total 7,711.00

Total Packaging Cost ( 10,736 + 7,711.00) 18,447.00

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Note 4: Production Supplies
Items Quantity Unit Cost Amount
Hair Nets 3 10.00 30.00
Pot Holder 6 5.00 30.00
Gloves (100pcs) 2 75.00 150.00
Apron 3 41.50 124.50
Total 334.50

Note 5: Tools and Implements

Items Quantity Unit Cost Amount
Mixing basin 2 255.75 511.50
Knife 1 75.00 75.00
Chopping board 1 259.00 259.00
Tongs 1 35.00 35.00
Steel Spatula 1 39.00 39.00
Wooden Spatula 1 29.00 29.00
Container 3 39.00 117.00
Strainer 1 30.00 30.00
Mixer 1 81.75 81.75
Measuring Cups set 1 72.50 72.50
Weighing scale 1 279.29 279.29
Flan molder 600 5.00 3000.00
Total 4,529.04

Note 6: Cleaning Supplies & Materials

Items Quantity Unit Cost Amount
Dishwashing Liquid 6L 65.00 390.00
Hand Soap 3L 18.00 54.00
Sponge 4 30.00 120.00
Soft Broom 1 100.00 100.00
Dust Pan 1 75.00 75.00
Foot Rug 4 20.00 80.00
Mop 1 306.25 306.25
Trash Bin 2 25.00 25.00
Trash Bag 4 packs 57.00 228.00
Scrub Sponge 2 23.75 47.50

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 Soap Container 1 28.75 28.75
Total 1454.50

Note 7: Office Supplies

Items Quantity Unit Cost Amount
Calculator 1 220.00 220.00
Record Notebook 4 17.00 68.00
Official Receipt 4 Booklets 100.00 400.00
Ballpen 10 7 70.00
Cellphone 1 800.00 800.00
Printer 1 4200.00 4,200.00
Laptop 1 14710.00 14,710.00
Cash Box 1 450.00 450.00
Total 20,918.00

Note 8: Other Supplies and Implements

Items Quantity Unit Price Total Price
First Aid Kit 1 499.75 499.75
Fire Extinguisher 1 2,000.00 2,000.00
LED Bulb 3 150.00 450.00
Total Cost 2,949.75

Note 9: Rent Expense

One Month Deposit (Production) 5,000.00
One Month Advance (Production) 5,000.00
Rent Expense 10,000.00

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Note 10: Salaries of Employees
Daily Salary of Production Worker 308.75
Multiply by: Number of worker 3
Daily Salary of Production Workers 926.25
Multiply by: Number of Operating Days in a Month 22 20,377.50
Employee Benefits
SSS Contribution 525.70
PhilHealth 100
PAG-IBIG 100
Total 725.70
Multiply By Number of Workers 3 2,177.10
Salary Expense 22,554.60

Note11: Advertising Expense

Free Taste 4,000.00
Flyers and Posters 350.00
Total 4,350.00

Note 12: Taxes and Licenses

Barangay Business Clearance 250.00
BIR Registration Fee 750.00
Business Plate 150.00
Sanitary Business Fees 100.00
Sanitary Inspection Fees 125.00
Sewer Connection Fees 600.00
Tax Clearance and Certification Fees 100.00
Business Cedula 5.60
Mayor's Permit 200.00
Fire Inspection Fees 45.00
SEC Registration Fee 2,725.00

Total Cost of Permits and Licenses 5,050.60

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Note 13: Utilities Expense
Water 121.50
LPG 1,800.00
Electricity 912.25
Monthly Utilities Expense 2,833.75

Note 14: Feasibility Cost

Photocopy 650.00
Print 800.00
Electricity 500.00
Total Cost of Feasibility 1,950.00

Note 15: Transportation Expense

Unleaded gas 30.00
Multiply by: Liters per month 48
Total Cost of Feasibility 1,488.00

J. LABOR REQUIREMENTS
Berry Flantastic plans to hire three workers. The two workers will be working on the
production site to manufacture the product. One worker will be employed to deliver the
product to distributors. Each employee will receive his/her salary every two weeks with a
minimum wage of P285. Furthermore, each employee will be receiving a 13th month pay.

Note: Summary of revisions

1. footing of project cost pg 34

2. selling price pg 32
3. footing of raw mat. Pg 28
4. footing of cleaning supplies & mat pg. 30

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