CHAPTER IV
TECHNICAL ASPECT
Service/Production Process
Here are the technical steps for how the business products are provided:
1. Insert cash (coins or bills).
2. Select either juice or coffee.
3. If choosing juice, pick a flavor; if selecting coffee, choose a flavor and specify whether you want
it iced or hot.
4. Receive any change if the amount inserted exceeds the price.
5. Wait patiently as the drink is prepared.
Figure 4.
Vending Machine
Presented in Table 17 is the vending machine required for the operation of the proposed
business. For its complete operation, a total of P200,000 for the vending machine is needed.
Table 17.
Vending Machine
Particulars Quantity Unit Cost Amount
Vending Machine 1 120 000 120 00
Depreciation
Presented in Table 18 is the annual depreciation of the Vending Machine that will be used for
the business.
Table 18.
Depreciation
Particulars Quantity Amount Estimated Year 1 Year 2 Year 3
Life
Vending 1 120 000 10 12 000 12 000 12 000
Machine
Table 19.a.
Production Capacity of Juice
Year Production Capacity
2022 50 400
2023 50 400
2024 50 400
Table 19.b.
Production Capacity of Coffee
Year Production Capacity
2022 66 600
2023 66 600
2024 66 600
Purchase Material
Materials such as refills of juice and coffee powder, and cups will be made monthly by the
Product Filler. Table 20 expresses that the business will incur P297,300 for the supply of the
aforementioned for the first year.
Table 20.
Purchase Material
Particulars Quantity Unit Costs Months Amount
Juice Powder 30 150 /kg. 12 54 000
Coffee Powder 40 190 /kg. 12 91 200
Paper Cups 9 750 1.3 /cup 12 152 100
Total 9 820 297 300
Projected Cost of Purchase Material
Table 21 shows the cost of supply purchase from Year 1 to Year 3. For Years 2 and 3, the business
will purchase the same quantity every month. Cost of purchase material is assumed to be equal for the
preceding years.
Table 21.
Projected Cost of Purchase Material
Year Annual Cost
2022 297 300
2023 297 300
2024 297 300
Total 891 300
Permit, Taxes, Licenses
Table 22 displays the operating expenses of the business permit, taxes, and licenses that the
business must comply with.
Table 22.
Summary of Permit, Taxes and Licenses
Particulars Amount
Business Permit 1 500
Notary for Business Permit 300
BIR 0605 Annual Registration Fee 500
Signboard Fee 250
BIR TIN Registration 500
Total 3 050
Projected Permit and Licenses
The following years in the business will incur only the business permit and Annual BIR
registration fee therefore, cost will reduce to P2,000 in 2023. And will only incur the business permit in
2024 because the BIR annual registration fee will no longer a requirement under the EOPT act therefore,
cost will reduce to 1,500 as shown in the Table 23.
Table 23.
Permit, Taxes and Licenses
Year Total Cost
1 3 050
2 2 000
3 1 500
Utility Expense
Table 24 presents the amount of utility expense that the business will incur per month and the
annual cost to be incurred by the proposed business.
Table 24.
Utility Expense
Utility Source Basis Rate per Month Annual Total Cost
Power Supply NORDECO kw/hr 2 000 24 000
Water TCWD m³ 2 000 24 000
Total 48 000
Projected Utility Expense
Table 25 shows the projected utility expense of the proposed business for the next 3 years. It is
assumed to have an annual increase of 2%.
Table 25.
Projected Utility Expense
Year Total Cost
1 48 000
2 48 960
3 49 920
Table 26.
Summary of Project
Particulars Year 1 Year 2 Year 3
Cost of Purchase 891 900 891 900 891 900
Material
Depreciation 12 000 12 000 12 000
Permit, Taxes and 3 050 2 000 1 500
Licenses
Utility Expense 48 000 48 960 49 920
Total Operating 954 950 954 860 955 320
Expenses
Channels of Distribution
The business requires a reliable supplier of cups, juice, and coffee powder with a proven track
record of delivering high-quality products. This ensures smooth operations and prevents issues like
inventory shortages.
Philippine Vending Corporation
54 E. Rodriguez Jr. Avenue Bagong Ilog Pasig City 1600
(632) 8477-3333
customercare@[Link]