CHAPTER 3

RESULTS AND DISCUSSION

MARKETING ASPECT

Marketing, as a process, involves perceiving, understanding,

stimulating, and satisfying customers’ needs, wants, and expectations within
a targeted market by offering goods or services that surpass those of
competitors. It serves as a vital link between a society’s material
requirements and its economic patterns of response, thus satisfying these
needs through exchange processes and the establishment of long-term
relationships.

The marketing aspect covers a range of components that influence the

success or failure of a proposed business. These include market analysis,
demand and supply analysis, marketing strategies, business name and logo
development, and other relevant factors. Market analysis and segmentation
are crucial techniques used to identify target markets and their unique
characteristics, facilitating the customization of products and services to
meet specific consumer needs. Understanding the factors that influence
consumer behavior, such as cultural, social, and personal factors, is also
critical in developing effective marketing strategies (Kotler & Armsrong,
2020)

In line with these principles, Litangfan’s Boundless Bakes will employ

various marketing techniques within the marketing aspect. This includes the
selection of target markets through market analysis and segmentation, a
comprehensive understanding of factors influencing consumer behavior, and
the implementation of activities aimed at acquiring and retaining customers.
Additionally, it presents the findings of surveys and interviews conducted,
assesses the feasibility of the proposed business within the target market,
evaluates both direct and indirect competitors, and outlines projections for
customer acquisition and sales.

A.
A. MARKET DESCRIPTION

Litangfan’s Boundless Bakes offers a variety of freshly baked breads,

catering to the preferences of both local individuals and retail stores in the
Barangay Guina-ang and neighboring Barangay Mainit.

One of the challenges faced by the residents of Guina-ang is the

inconvenience of traveling 12.8 kilometers to Central Bontoc, where stores
currently procure bread. The high demand for baked goods in our target
markets can be attributed to various factors. Firstly, farming is the
predominant source of income for most locals, given the expansive
agricultural land in the municipality. Consequently, coffee, soft drinks, and
bread have become essential components of their daily routines. During the
peak seasons for planting and harvesting, bread is always brought with them
as a snack or a substitute for rice. Secondly, the cold climate in Guina-ang
makes coffee the beverage of choice, often accompanied by pastries and
bread. Lastly, coffee, drinks, and bread hold significant importance as staple
foods during special occasions, holidays, and funerals.

In line with supporting local communities, Litangfan’s Boundless Bakes

will introduce a line of packed bread specially tailored to meet the needs of
local store owners in Barangay Mainit and Guina-ang. Recognizing the
challenges posed by the dispersion of stores in Guina-ang, our bakery will
offer packed bread for the convenience of these businesses, enabling them to
maintain and further expand their market. While store owners will primarily
benefit from our packed bread offerings, individuals within the community will
also have the opportunity to indulge in the delectable products of Litangfan’s
Boundless Bakes, available for purchase on a per piece basis.

The proposed bakery considers competition from the following

established suppliers – Evelyn’s Bakeshop, Cabello’s Bakery, and Mina’s
Bakery – who entered the target market ahead of us. However, with
confidence in the quality of our products and our strategic proximity to the
demand within the target market, Litangfan’s Boundless Bakes will have a fair
chance of attaining a significant market share.

15
 With the existing bakery ceasing deliveries to Guina-ang due to the
distance from Central Bontoc, locals and store owners were inconvenienced
by the need to travel to Central Bontoc to purchase baked goods. By
establishing Litangfan’s Boundless Bakes within the target market area, we
are providing a considerably more convenient and accessible option for
people to satiate their daily cravings for fresh bread and pastries.

B. PRODUCT DESCRIPTION

Litangfan’s Boundless Bakes will provide quality breads and a wide

selection of baked goods that are perfect for everyday indulgence, as well as
for those special holidays and occasions. With a focus on variety, the bakery
aims to offer an extensive range of products to cater to different tastes and
preferences. Whether customers prefer to purchase individual pieces or opt
for convenient packs, Litangfan’s Boundless Bakes is committed to
accommodating the diverse needs and wants of buyers.

The table below shows the products that Litangfan’s Boundless Bakes
will offer to its customers

Table 3.1 Proposed Products

Pandesal  Pandesal is a traditional
Filipino bread that is soft and
slightly sweet. It has a crunchy
exterior and is usually
consumed during breakfast or

Figure 3.1 Pandesal as a snack.

Peanut  Peanut bread is a bread with a

Bread filling made of peanut butter
that have roasted peanut bits,
offering a delightful rich and
nutty flavor. It is often enjoyed
as a sandwich or on its own as
a delectable treat.
Figure 3.2 Peanut Bread

16
Cinnamo  Cinnamon rolls with cream
n Rolls cheese is a pastry made by
with infusing warm and comforting
Cream cinnamon flavors into a fluffy
Cheese roll. The roll is then filled with
a smooth cream cheese filling,

Figure 3.3 Cinnamon creating a melt-in-your-mouth

Bread experience.

Cheese  Cheese rolls are bread rolls

Rolls filled with gooey cheese filling
encased in a light and buttery
crust. Every bite offers a
delightful blend of flavors that
will delight every cheese lover.

Figure 3.4 Cheese Roll

Longjan  Longjan is a Filipino doughnut
with cheese filling that is
either topped off with a sugar
glaze or powdered with fine
sugar. It is best enjoyed for its
distinct taste that is unique to
Filipino cuisine.
Figure 3.5 Longjan
Buko Roll  Buko roll is a soft roll that is
filled with coconut cream and
small slices of soft coconut
meat.

Figure 3.6 Buko Roll

17
Butchi  Butchi is a bite-sized doughnut
made with glutinous rice flour
and filled with a sweet
munggo or glutinous rice
mixture. It is a popular Filipino
dessert that balances the
chewy exterior and the
Figure 3.7 Butchi
smooth, sweet filling.
Banana  Banana muffins are made with
Muffins overripe bananas, resulting in
a naturally sweet and delicious
treat. They have a fluffy
texture and are ideal as a

Figure 3.8 Banana Muffin quick breakfast or snack.

Spanish  Spanish bread is a bread roll

Bread filled with a sweet and buttery
mixture delicately rolled and
coated in breadcrumbs. It is a
classic Spanish pastry that is
soft and fluffy.
Figure 3.9 Spanish Bread
Choco  Choco roll is a decadent and
Roll irresistible bread roll similar to
Spanish bread but it is
delicately filled with an
indulgent chocolate cream.
Figure 3.10 Choco Roll
Pandecoc  Pandecoco is a bread roll filled
o with desiccated coconut and
brown sugar. When tasted,
one can experience a
delightful harmony of textures

Figure 3.11 Pandecoco and flavors.

Ube  Ube bread rolls have ube jam

18
Bread enveloped in soft, fluffy bread,
served with toasted coconut.

Figure 3.12 Ube Bread

Mamon  Mamon is a local Filipino
muffin. It is soft, sweet and
moist muffin shaped in an
interesting salakot shape.
Salakot is a traditional dome-
shaped light headgear worn by
locals to protect themselves
from the scorching heat from

Figure 3.13 Mamon the sun.

Loaf  Loaf is a bread which has been

shaped and baked in one
rectangular shape. It is usually
large enough for more than
one person and can be cut
into slices.
Figure 3.14 Loaf

19
Table 3.2 Proposed Prices
Prices

Product Per Piece Per Bag(wholesale)

Pandesal ₱3.00 ₱20.00

Peanut Bread ₱5.00 ₱23.00
Cinnamon Rolls ₱15.00 ₱23.00
Cheese Bread ₱5.00 ₱23.00
Longjan ₱5.00 ₱23.00
Buko Roll ₱5.00 ₱23.00
Butchi ₱5.00 ₱23.00
Banana Muffins ₱5.00 ₱23.00
Spanish Bread ₱5.00 ₱23.00
Choco Roll ₱5.00 ₱23.00
Pandecoco ₱5.00 ₱23.00
Ube Bread - ₱23.00
Mamon - ₱23.00
Loaf - ₱45.00
Table 3.2 provides the starting prices for the products offered both per
piece and per bag. The prices were identified using the Market Price Strategy
wherein the prices offered were at par with the prevailing prices offered in the
bread industry.

C. DEMAND AND SUPPLY ANALYSIS

Analysis of demand determines the type of bread that customers are

willing to buy, as well as the quantity they are likely to purchase and at what
price range. This information is then utilized to determine selling costs and
make any necessary product modifications. To ascertain the demand for the
business, the proponents obtained information on the actual population of
individual and sari-sari stores from the Bontoc Municipal Planning and
Development Council Office and Municipal Health Office, respectively. Supply
analysis, on the other hand the prices of products, input prices, the
expectations of the market, and the number of producers present.

20
INDIVIDUALS:

Table 3.3 Demand-Supply Analysis for Individuals

Year Projected Net Demand Supply GAP
Population (a) (90%) (56%) (34%)
2025 1,552 1,397 869 528
2026 1,602 1,442 897 545
2027 1,668 1,501 934 567
2028 1,729 1,556 968 588
2029 1,793 1,614 1,004 610

Table 3.3 shows the demand-supply analysis for individuals. As

evidenced by the survey results, the demand for the proposed business is
high as it shows 90% of demand (refer to Appendix E, Question 5 on Page
143). Meaning, out of 1,552 for the year 2025, 1,397 of the total population
agreed with the establishment of a local bakery. Hence, the locals are willing
to buy from the establishment if it will be established.

There are no direct competitors for the proposed business within the
locality. However, due to the presence of indirect competitors from Central
Bontoc where most of the locals buy bread and where store owners purchase
the breads that they sell, 56% of the population have already preferred stores
where they buy bread. Supply is computed by multiplying the demand
percentage, which is 90%, by the supply percentage in question no. 2, which
is 62% (refer to Appendix E, Question 2 on Page 141), representing the
percentage of the respondents who already have preferred establishments for
availing baked products. Nevertheless, the proposed business can still enter
the market as it will be more convenient for store owners and locals to buy
breads.

The free market, computed by subtracting the supply percentage

(56%) from the demand (90%), results to 34% as shown in table 3.3. This
indicates that out of 90% demand, 56% were already supplied and 34% are
not yet supplied.

21
22
Table 3.4 Projected number of customers (Individuals)
Year Projected Demand Supply GAP Marke Number
Net (90%) (56%) (34%) t of
Populatio Share Customer
n (a) s Per
Year
2025 1,552 1,397 869 528 76% 401
2026 1,602 1,442 897 545 76% 414
2027 1,668 1,501 934 567 76% 431
2028 1,729 1,556 968 588 76% 447
2029 1,793 1,614 1,004 610 76% 464

Basing from the data presented in table 3.3, table 3.4 displays the
projected number of customers pertaining to individuals. The business
assumed the same market share for all the years. The same market share of
76% (refer to Appendix H on Page 168), that is maintained throughout the
years signifies the ability of the business’ revenues to grow at a pace that is
parallel to the increasing total market. The market share percentage is
multiplied to the difference of the demand and supplied to predict the
number of customers the per year.

STOREOWNERS

Table 3.5 Demand-Supply Analysis for Storeowners

Year Projected Net Demand Supply GAP
Population (a) (100%) (17%) (83%)
2025 62 62 11 51
2026 77 77 13 64
2027 96 96 16 80
2028 119 119 20 99
2029 148 148 25 123

Table 3.5 shows the demand-supply analysis for individuals. As

evidenced by the survey results, the demand for the proposed business is
high as it shows 100% of demand (refer to Appendix E, Question 7 on Page
158). Meaning, all of the total population agreed with the establishment of a

23
local bakery. Hence, the locals are willing to buy from the establishment if it
will be established.

The supply of 17% was computed by multiplying the demand

percentage which is 100% by the supply percentage of 17.39% (refer to
Appendix E, Question 2, on Page 152). The free market, computed by
subtracting the supply percentage (17%) from the demand (100%), results to
83%. This indicates that out of 100% demand 17% were already supplied and
83% was not yet supplied.

Table 3.6 Projected number of customers (Storeowners)

Year Projected Demand Supply GAP Marke Number
Net (100%) (17%) (83%) t of
Populatio Share Customer
n (a) s
2025 62 62 11 51 100% 51
2026 77 77 13 64 100% 64
2027 96 96 16 80 100% 80
2028 119 119 20 99 100% 99
2029 148 148 25 123 100% 123

Basing from the data presented in table 3.5, table 3.6 displays the
projected number of customers pertaining to storeowners. Market share was
computed as the average of as average of annual normal capacity divided by
annual quantity demanded for each of the products. Since Litangfan’s
Boundless Bakes will be the only bakery in the barangay, the target market
share for the store owners is 100%. This signifies the business’ goal to be the
supplier of the local sari-sari stores of Guina-ang and Mainit. The market
share percentage is multiplied to the difference of the demand and supplied
to predict the number of customers the per year. Refer to Appendix H on
Page 168 for the computation of market share.

24
D. PROJECTED SALES
Table 3.7 Projected Sales Summary
2025 2026 2027 2028 2029
Individuals:
Pandesal ₱52,416 ₱56,250 ₱60,925 ₱65,879 ₱68,462
Peanut Bread ₱40,320 ₱42,886 ₱46,626 ₱50,593 ₱52,746
Cinnamon ₱132,480 ₱143,618 ₱155,421 ₱167,926 ₱174,384
Cheese Bread ₱54,720 ₱58,843 ₱64,241 ₱68,893 ₱71,045
Longjan ₱123,840 ₱131,649 ₱142,987 ₱155,008 ₱167,748
Buko Roll ₱66,240 ₱70,811 ₱76,674 ₱81,810 ₱85,039
Butchi ₱47,040 ₱49,867 ₱53,879 ₱58,128 ₱60,281
Banana Muffin ₱10,125 ₱10,524 ₱10,939 ₱11,370 ₱11,376
Spanish Bread ₱37,440 ₱39,894 ₱42,482 ₱46,287 ₱48,440
Choco Roll ₱40,320 ₱43,883 ₱46,626 ₱50,593 ₱52,746
Pandecoco ₱40,320 ₱42,886 ₱46,626 ₱50,593 ₱51,669
StoreOwners:
Pandesal ₱35,280 ₱55,851 ₱72,530 ₱97,957 ₱120,562
Peanut Bread ₱69,552 ₱88,315 ₱116,773 ₱147,312 ₱181,973
Cinnamon ₱61,824 ₱88,315 ₱108,432 ₱138,646 ₱173,308
Cheese Bread ₱54,096 ₱64,229 ₱91,750 ₱112,650 ₱138,646
Ube Bread ₱61,824 ₱80,286 ₱100,091 ₱129,981 ₱164,643
Butchi ₱61,824 ₱80,286 ₱108,432 ₱138,646 ₱173,308
Banana Muffin ₱52,992 ₱73,405 ₱95,325 ₱118,840 ₱148,550
Spanish Bread ₱70,656 ₱100,931 ₱123,922 ₱158,453 ₱198,066
Mamon ₱70,656 ₱91,756 ₱123,922 ₱158,453 ₱198,066
Pandecoco ₱69,552 ₱88,315 ₱116,773 ₱147,312 ₱181,973
Loaf ₱105,840 ₱125,665 ₱163,192 ₱220,402 ₱271,265
Total Sales ₱1,359,357 ₱1,628,465 ₱1,968,571 ₱2,375,731 ₱2,794,297
Kindly refer to Appendix J on Page 178 for a more detailed computation of the projected sales.

25
E. MARKET ANALYSIS
SWOT Analysis

In order to ensure a successful establishment of a bakery in Guina-ang,

Bontoc, Mountain Province, conducting thorough research on the related
industry is essential. This research includes an examination of the activities
and strategies employed by potential competitors to avoid facing potential
setbacks shortly after the bakery begins operations.

To facilitate this, a SWOT (Strengths, Weaknesses, Opportunities, and

Threats) analysis has been prepared. This analysis serves as a valuable tool
for brainstorming and strategic planning, helping to identify the strengths and
weaknesses of the bakery’s business model, as well as the potential
opportunities and threats it may face in the market. By conducting such an
analysis, the bakery can adopt a proactive approach to address any
challenges and capitalize on favorable circumstances, ensuring long-term
success in the industry.

STRENGTHS:

1. Strategic business location

 The location of the establishment is located at the heart of the
barangay. Hence, it is accessible to all the locals and it is where the
jeepneys of Barangay Mainit can drop by to pick up their orders
with ease.
2. Quality customer service
 Providing excellent customer service can foster loyalty and
distinguish the bakery from potential competitors. The
management will ensure that all employees are of good character
and will be offered opportunities for trainings to improve their
services.

3. Operations do not require advanced technology

 The required equipment for the business operations are easy to

use.
4. Online Presence
 The business utilizes social media platforms as an avenue to
connect with customers.

26
 5. Sustainability Plan
 The establishment has articulate plans not only to meet short term
goals but also long term goals.

WEAKNESSES:

1. Limited brand recognition

 The business is new and has no established name in the market. It
still has to develop rapport with the locality in order to sell the
products offered.
2. Limited differentiation
 The products being offered are similar to other bakeries.
3. Limited access to skilled labor
 There is a difficulty in hiring experienced staff due to the rural
location. Skilled labor shortage may affect operational efficiency
and product quality.

OPPORTUNITIES:

1. Accessible location
 The business in an area where locals and vehicles usually pass by. It
is also close to the local open gym where most of the locals gather.
2. Increasing Population
 A growing population in the barangay indicates potential expansion
of the customer base.
3. No direct competition within the locality
 The absence of direct competition provides an opportunity to
establish a strong market presence.
4. Market Expansion
 The opportunity to open new branches or franchise the bakery’s
services and allow it to reach new markets and grow it’s customer
base.

THREATS:

1. New entrants
a. Potential new bakeries entering the market may pose a threat to
the bakery's market share.
2. Inflation
b. Rising costs associated with inflation can impact profitability,
requiring effective cost management.
3. Shifting customer preferences

27
c. Changes in consumer tastes and preferences may affect the
bakery's product offerings and require adaptation to stay
competitive.

28
SWOT Matrix
Table 3.8 SWOT Matrix
STRENGTHS WEAKNESSES
1. Strategic business location 1. Limited brand recognition
2. Quality customer service 2. Limited differentiation of
3. Operations do not require products
advanced technology 3. Limited access to skilled
4. Online Presence workers
5. Sustainability Plan
OPPORTUNITIES  Promote the business through 5. Regularly assess and
1. Accessible word-of-mouth and various adapt product offerings
location advertising platforms, based on evolving
2. Increasing emphasizing on the bakery’s customer preferences.
population exclusive presence in the Introduce innovative
3. No direct community (S1,O3). flavors and variations to
competition  Leverage quality customer address the changing
within the service as a marketing tool to needs of the growing
locality attract and retain customers, population, making the
4. Market particularly as the population bakery a dynamic and
Expansion grows. Positive customer appealing choice
experiences can lead to word- (W2,O2).
of-mouth recommendations. 6. Create a strong visual
(S2,O2) identity and branding
 Diversify product offerings. that resonates within the
Introduce new and innovative local community,
baked goods that cater to the showcasing the bakery
preference and demands of as a reliable and integral
the growing population (S3, part of their daily lives.
O2). (W1,O1).
 Utilize social media platforms
to create a rapport with
possible customers outside
the locality of the business.
(S4, O4)
 Establish a sustainability plan
in order to goals set for the
longevity and expansion of
the business. (S5, O4)
THREATS  Leverage quality customer  Enhance product innovation
1. New entrants service as a key differentiator by conducting regular
2. Inflation to create customer loyalty. market research and
3. Shifting Regularly gather feedback to implementing customer
customer adapt and improve services feedback mechanisms.
preferences promptly, making it Diversify the product line,
challenging for new entrants introducing unique variations
to match the customer that resonate with the local
experience (S2,T1). preferences, thereby
 Encourage innovation and creating a barrier for
experimentation to regularly potential new entrants
introduce new and exciting (W2,T1).
baked goods that aligns with  Implement comprehensive
changing customer training programs and
preferences (S3,T3) mentorship to upskill the
 Forge strong connections with inexperienced workforce
local producers in order to be (W3,T3).
able to negotiate pricing  Continuous advertisement of
(S1,T2). the business, emphasizing
on the quality of the
products (W1, T2).

29
F. MARKETING STRATEGIES USING 7 P’S OF MARKETING
1. Product
Litangfan's Boundless Bakes is committed to exceeding the
expectations of small businesses by delivering high-quality products.
Despite the presence of indirect competitors, the bakery prioritizes
creating freshly baked and delicious goods. In light of this, Litangfan's
Boundless continually evaluates and improves its product line to meet
the evolving needs of its valued customers.

2. Price

Table 3.9 Prices of Indirect Competitors

Cabello's Mina's
Evelyn's Bakery
Bakery Bakery
Product
Per
Per Bag Per Piece Per Bag
Piece
Pandesal ₱ 5.00 - ₱ 2.00 ₱23.00
Peanut Bread ₱ 5.00 - - ₱23.00
Cinnamon Rolls - ₱50.00 - ₱23.00
Cheese Bread - - ₱ 3.00 ₱23.00
Longjan ₱ 15.00 - ₱ 5.00 ₱23.00
Buko Roll - - ₱ 5.00 ₱23.00
Butchi ₱ 5.00 - ₱ 5.00 ₱23.00
Banana Muffins - - - ₱23.00
Spanish Bread - - ₱ 5.00 ₱23.00
Choco Roll - - ₱ 5.00 ₱23.00
Pandecoco ₱ 10.00 - ₱ 5.00 ₱23.00
Ube Bread ₱ 10.00 ₱55.00 - ₱23.00
Mamon - - ₱ 3.00 ₱23.00
Loaf - ₱75.00 ₱ 45.00 ₱45.00
Note: The products lacking specified price information indicate that the
bakery does not currently include these in their offerings.

30
 Litangfan's Boundless Bakes will provide products of quality at
affordable prices. To determine the value of each product, the market
price method was employed. This approach allows the use the prices of
goods and services in commercial markets as a benchmark. By
implementing this, the market can be penetrated effectively while
simultaneously providing customers with valuable offerings.
3. Place
The strategic location of Litangfan's Boundless Bakes in Fato,
Guina-ang is a prime spot for the business. Being at the center of
Barangay Guina-ang, it provides numerous advantages for the
operation of the business.
The selected location is conveniently situated along the main
road, providing easy transportation of supplies essential for the smooth
functioning of the business. Furthermore, the easy accessibility to
Litangfan's Boundless Bakes products will facilitate a hassle-free
shopping experience for customers. Moreover, the aforementioned
location is also where the signal for communication networks is strong
which benefits the business as it utilizes social media as an advertising
platform.

Figure 3.15 Business Location Map

4. Promotion
Litangfan’s Boundless Bakes plans to employ diverse
promotional strategies to raise public awareness and promote their

31
product line. To achieve this objective, the business intends to leverage
advertisements and other sales promotion techniques.
To reach a wide range of customers, Litangfan's Boundless Bakes
will utilize printed materials such as tarpaulins, both before and during
operation. These tarpaulins will be placed strategically in high-traffic
areas to maximize visibility. As required, the tarpaulins may be
updated or swapped to ensure accuracy and proper upkeep.
In addition, establishing a business presence on social media
platforms such as Facebook, Instagram, and others can significantly aid
in introducing products, not only within the target area but also to a
broader audience. Following each production cycle, videos highlighting
the baking process of the products will be shared on the business's
social media accounts. This allows customers and potential customers
to learn more about the offerings and gain insight into how the
products are prepared. Additionally, active online engagement with
customers will ensure timely responses to inquiries or concerns
regarding the products, building satisfaction and trust. Furthermore,
the business will utilize word-of-mouth advertising to encourage
customers to recommend the products to their peers or family
members.
Posting on social media platforms will be made on month before
the operation of the business. Meanwhile, the setting up of tarpaulins
as well as the distribution of flyers/brochures will be done when the
business starts its operations.

Table 3.10 Initial Advertisement

Total
Particulars Descriptions Quantity Unit Cost
Cost

₱1,800.0
Tarpaulins 5” x 8” 3 pcs ₱ 600.00
0
Flyers/ ₱1,000.0
8.5 x 13 in 100 packs ₱ 10.00
Brochures 0

32
 Social Media Internet 12-month ₱1,000.0
₱1,000.00
Accounts Connection subscription 0

₱3,800.0
Total
0
Note: Advertising cost will be treated as pre-operating activities. The
tarpaulins will be printed by Hart n’ Zoe and Ads.

Figure 3.16 Tarpaulin

The tarpaulin will be strategically positioned in three areas: (1) in front
of the building where the business will operate, (2) along the road just
before the junction adjacent to the location of the business, where most
jeepneys traveling to and from Bontoc are parked, and (3) along the road
leading to Mainit.

33
 Junction

Figure 3.17 Tarpaulin Placement

Figure 3.18 Facebook Page

Posting on social media platforms will be made on month before

the operation of the business. In lieu of the initial advertising
campaigns of the bakery, a Facebook page shall be utilized for posting
announcements events and product promotion.
5. People
In order to uphold a standard of exceptional customer service,
Litangfan's Boundless Bakes diligently selects and employs staff
members who meet the qualifications established by the management.

34
 Recognizing the importance of ongoing professional development, the
business actively provides its employees with opportunities to
participate in comprehensive training programs. These initiatives are
designed to continuously enhance their knowledge, refine their skills,
and improve the quality of services offered to the target market. By
investing in the growth and proficiency of its workforce, Litangfan's
Boundless Bakes strives to consistently exceed customer expectations
and maintain its reputation for excellence.
6. Partnership
To ensure a steady flow of supplies the business will establish a
partnership with Dm. Baylon Bakery Equipment and Supplies
Fabrication for the acquisition of all necessary equipment. Maintaining
strong linkage with local business who will be providing the raw
materials for the business will be maintained. This will ensure stability
in the supply of raw materials and projection of purchase prices.
Moreover, the business will partner with government agencies such as
the Department of Trade and Industry to provide more support for the
marketing strategies and finance of the business through participating
in the trainings and financial assistance provided by the said agency.
7. Packaging
Effective packaging plays a crucial role in branding,
accentuating a product's best features, and creating an unforgettable
experience for customers.

35
 Figure 3.19 Sample Product Packaging

Litangfan’s Boundless Bakes features packaging that includes

the business logo, nutritional information, product description,
expiration date, FDA approval logo, and HALAL approval logo. These
packaging elements provide consumers with the assurance that their
purchase meets the required standards, thereby increasing their
confidence in the product.

Litangfan’s Boundless Bakes will diligently include the expiry

date on the packaging of each product to ensure customers are well-
informed about the freshness and safety of the offerings.

8. Positioning
For individuals looking for high-quality products, Litangfan’s
Boundless Bakes will offer a variety of the most stimulating options —
each will create a positive experience for customers when they enjoy
our baked products. Litangfan’s Boundless Bakes’ products offer
different options in terms of type of bread and flavor. Furthermore, the
business is intensely focused on the needs of consumers and
customers.

36
37
BUSINESS NAME AND LOGO

Figure 3.20 Business Logo

The bakery, named Litangfan’s Boundless Bakes, derives its name from
“Litangfan” the indigenous term for Guina-ang, symbolizing its connection to
the community, and the phrase “boundless bakes”, reflecting the
establishment’s commitment to meeting the demand for baked goods
without limitations.

The color yellow, chosen as a representation of limitlessness, signifies

the bakery’s aspiration to establish a lasting presence in the target market.
Furthermore, the circular shape of the logo represents the continuous nature
of the bakery's operations and the unbroken relationship between the bakery
and its customers. At the center of the circle is an illustration of a basket of
bread, which represents the bakery's primary product. Bread is a staple food
item consumed during meals and is a crucial aspect of many cultures
worldwide. The basket's placement on a table conveys the idea of dining,
where people gather to eat and share food, emphasizing the bakery's social
aspect.

38
 In addition, the backdrop of the logo features mountains and a rising
sun, which symbolizes the bakery's location in Guina-ang, Bontoc, Mountain
Province, and the idea of freshness or new beginnings. The mountains
represent the natural beauty of the area where the bakery is located and the
sense of stability and permanence. The rising sun, on the other hand,
indicates the start of a new day and the freshness of the bakery's products,
symbolizing the bakery's commitment to using fresh ingredients in every
product they offer.

Tag Line

"Every bite, a boundless delight" perfectly encapsulates the essence of

Litangfan's Boundless Bakes, effectively communicating the bakery's
commitment to providing a delightful and exceptional culinary experience
with each and every product. The use of "Every bite" emphasizes the
attention to detail and quality that Litangfan's Boundless Bakes puts into
crafting their baked goods, setting the expectation that each bite will deliver
a moment of pure delight. The term "boundless delight" suggests that the joy
and satisfaction gained from consuming the bakery's products know no limits,
conveying a sense of abundance and endless enjoyment. This tagline not
only promises an extraordinary and gratifying experience but also captures
the essence of the bakery's brand promise, establishing it as a destination for
those seeking unparalleled flavors and unbounded pleasure in their culinary
adventures.

In essence, the tagline "Every bite, a boundless delight" serves as a

powerful branding tool for Litangfan's Boundless Bakes, emphasizing the
unique and gratifying experience that awaits customers. It communicates the
idea that the bakery's products are not just delicious treats but gateways to
boundless joy and satisfaction, reinforcing the idea that every bite is a
moment of unbounded pleasure. This tagline has the potential to resonate
with consumers who seek extraordinary culinary experiences, positioning
Litangfan's Boundless Bakes as a distinctive and highly desirable
establishment for those with a passion for exceptional flavors and unending
delight.

39
40
TECHNICAL ASPECT

The Technical Aspect deals with the effective tool for long term planning
as far as the facilities and operation is concerned. It helps to determine the
supplies, utilities, and equipment to be acquired, as well as the location and
layout of the project. It also aims to discuss how and when the service is to
be rendered, how much will it cost to offer the service. Moreover, the
technical aspect should most essentially support the financial information of
the business.
A. PROJECT LOCATION AND DEVELOPMENT SITE
The business will be located in Barangay Guina-ang, Bontoc, Mountain
Province, at the second floor of the barangay health clinic. The business’
location is directly beside the Guina-ang Mainit road.
It is strategically located at the said location because of its suitability for
the targeted market. The said location is very much accessible to students,
villagers, tourist who are planning to travel to Mainit for a vacation, and
common passengers of jeepneys.

Figure 3.21 Business Location (Side View)

41
 Figure 3.22 Business Location (Aerial View)

B. FLOW OF OPERATION

FLOW OF OPERATION- SELLING PROCESS:

Start Start

Inquire with the buyer Approach the

about the type of bread saleslady to buy
and the amount of slices bread.
he or she intends to
purchase.
Tell his/her order to
the saleslady.
Pack the customer's
order and request
payment.
Receives the product
and pays the bill.
Accept the payment and
give the customer's
order, whilst giving
his/her change. Receives the receipt.

End End

Figure 3.23 Salesperson Figure 3.24 Customer

42
FLOW OF OPERATION FOR BREAD MANUFACTURING PROCESS:

Preparation
of raw
materials Remove the
and freshly
equipment. baked Cooling
bread from
the pans.

Mixing of the
ingredients to
make a
dough. Baking/
Slicing
(Kneading) Cooking

Dividing,
weighing and Fermentation.
Let the dough Packaging
shaping the
dough into rise or double
equal sizes. its size.

Moulding Panning Display

of the the
pans. dough

End

Figure 3.25 Bread Manufacturing Process

43
C. PROJECT TIME TABLE
Before the business will start, the following activities should be
accomplished first. These are the following:
1. Feasibility Study
 It is an analysis that considers all of a project’s relevant factors
including economic, technical, legal, and scheduling consideration
to ascertain the likelihood of completing the project successfully.
This is the assessment of the viability of the proposed business. It
will take 5 months from January 2024 to May 2024.
2. Procurement of the Needed Funds
 This involves the procurement of funds from the contribution of
each partner to finance the business operation.
3. Partnership Formation
 The partners will make and file their Articles of Partnership in the
Securities and Exchange Commission.
4. Furnishing of the Business Site
 This involves furnishing the space where the business is supposed
to be situated.
5. Purchase and Installation of Furniture’s and Fixtures and
Equipment
 The business will purchase the necessary supplies and equipment
in Baguio City, a nearby city, and, if available, the remaining items
will be purchased in Bontoc, Mountain Province. Installation of the
equipment and supplies will take place after they are acquired.
6. Processing of Legal Documents
 The procurement of business permits and the accomplishment of
the legal requirement are done in this activity. Fees and licenses are
paid to obtain a Taxpayer Identification Number (TIN) after
registration.
7. Hiring of Employees
 This stage is where the recruitment and selection of employees are
done.
8. Training of Employees

44
  New hires receive instruction and lectures on the procedures they
must adhere to while working for the business. Additionally,
methods and recipes for baking the various products offered by the
business are disclosed.
9. Business Advertisement
 The public will become aware of the business through the use of
tarpaulins, pamphlets, tittle tattle, and social media sites like
Facebook, Instagram, and YouTube.
10. Purchase of Raw Materials
 This entails purchasing the raw materials—such as flour, sugar,
wheat, baking soda, and other ingredients—necessary for the
business’ products.
11. Start of the Business Operation
 The Business will start after the pre-operating activities will be
accomplished.
As to the planning of the business, the Gantt chart below shows the
program of activity in putting up the proposed business with the specific time
in each activity. Each activity has its time frame to achieve the target date of
operation.

2023 2024 2025

Activities Aug Sept Oct Nov Dec J an Feb Mar Apr May J une J uly August Sept Oct Nov. Dec. J an
Feasibility Study
Procurement of Needed Funds
Partnership Formation
Furnishing of Business Site
Purchase and Installation of Furniture's and Fixture's and Equipment
Processing of Legal Documents
Hiring of Employees
Training of employees
Business Advertisement
Purchase or Raw Materials
Start of Business Operation

Figure 3.26 Gantt Chart

D. DESIGNATED AREAS FOR SERVICES

The space is subdivided into three areas. This is to allow efficient layout both
for the business processes as well at the materials and products for more

45
efficient way of delivering service to the customers. Specifically, the key
areas are as follows:
1. Kitchen area
 This area consists of equipment’s like the oven, refrigerator roller,
cooling rack, dough maker, gas stove and other furniture. It is
where the breads would be prepared, cooked, and cooled. This area
also includes the storage area for the materials and kitchen
supplies.
2. Packaging area
 This is a space where the products are being packed and labelled
after being cooled.
3. Serving area
 It occupies the widest portion of the space where the saleslady
would be serving the customer. It also consists of the furniture’s like
the glass display cage and the wooden rack where the cooked and
packed bread would be displayed.
E. PURCHASES

This shows the equipment, supplies, furniture, and other materials to

be used in the business operations.
Equipment Qty. Unit Price Total Price
Computer Set (Acer) 1 ₱ 38,675.00 ₱ 38,675.00
Printer (Canon) 1 ₱ 9,995.00 ₱ 9,995.00
Surveillance Camera 2 ₱ 1,650.00 ₱ 3,300.00
Digital Vault 1 ₱ 1,799.00 ₱ 1,799.00
Total ₱ 53,769.00
Table 3.11 Summary of Office Equipment
Source: Tiongsan Harrison, La Trinidad

Table 3.12 Summary of Kitchen Equipment

Kitchen Equipment Qty. Unit Price Total Price
Gas Deck Oven (3 Decks 6 Tray) 380 1 ₱ 125.000.00 ₱ 125,000.00
kgs with glass windowa
Gas Deck Oven (2 decks 4 trays) 1 ₱ 88,000.00 ₱ 88,000.00
Refrigerator (Fujidenzo) 1 ₱ 19,450.00 ₱ 19,450.00

46
 Kalan 1 ₱ 2,500.00 ₱ 1,500.00
Loaf Slicer 1 ₱ 20,790.00 ₱ 20,790.00
Dough Roller 1 ₱ 31,999.00 ₱ 31,999.00
Electric Bag Sealer 2 ₱ 1,900.00 ₱ 3,800.00
Commercial Dough Mixer (6 kgs) 1 ₱ 57,000.00 ₱ 57,000.00
Gas Tank 4 ₱ 880.00 ₱ 3,520.00
Regulator 3 ₱ 200.00 ₱ 600.00
Stainless Banca 1 ₱ 5,000.00 ₱ 5,000.00
Exhaust Fan 2 ₱ 1,255.00 ₱ 2,510.00
Fire Extinguisher 2 ₱ 1,800.00 ₱ 3,600.00
Total ₱ 36,889.00
Source: Dagupan City, Pangasinan, Caranto Hardware, Tiongsan Harrison, La
Trinidad, SM, Baguio City, and Aglipay General Merchandise

Table 3.13 Summary of Furniture and Fixtures

Furniture and Fixtures Qty. Unit Price Total Price
Glass Display Cabinet 4 decks 2 ₱ 12,000.00 ₱ 24,000.00
Stainless Table 2 ₱ 3,199.00 ₱ 6,398.00
Cooling Rack 2 ₱ 5,000.00 ₱ 10,000.00
Office Table 1 ₱ 4,000.00 ₱ 4,000.00
Uratex Monoblock 5 ₱ 300.00 ₱ 1,500.00
5- Layer Open Shelf Cabinet 2 ₱ 5,000.00 ₱ 10,000.00
Total ₱ 55,898.00
Source: Lusad’s Furniture Shop and Tiongsan Harrison, La Trinidad

Table 3.14 Summary of Tools and Utensils

Tools and Utensils Qty. Unit Price Total Price
Basin 4 ₱150.00 ₱ 600.00
Loaf Pan Set 10 ₱171.00 ₱1,710.00
Flour Sifter 5 ₱196.00 ₱980.00
Flat Sheet Pan (13’’x18”) 10 ₱350.00 ₱3,500.00
Weighing Scale 2 ₱250.00 ₱500.00
Aprons 10 ₱30.00 ₱300.00
Knife Set (2 sets) 2 ₱1,149.00 ₱2,298.00
Dough Cutter 5 ₱69.75 ₱348.75

47
Non-stick Baking Pan 5 ₱322.00 ₱966.00
24 Cup Mini Muffin Pan 2 ₱335.00 ₱670.00
Tongs 5 ₱43.75 ₱217.50
Spoon Set (1 dozen) 1 ₱130.00 ₱130.00
Colander 2 ₱150.00 ₱300.00
Liquid Measuring Cup 2 ₱130.00 ₱260.00
Rolling Pin 4 ₱449.00 ₱1,796
Silicon Brush Set 2 ₱279.00 ₱558.00
Measuring Spoon Set 2 ₱150.00 ₱300.00
Measuring Cups Set 2 ₱200.00 ₱400.00
Round Pan 30 ₱150.00 ₱4,500.00
Wooden Bread Paddle 2 ₱600.00 ₱600.00
Total ₱20,934.25
Source: Tiongsan Harrison, La Trinidad, and Kudkudong Trading

Table 3.15 Summary of Kitchen Supplies

Kitchen Supplies Quantity Unit Price Total Price

Dishwashing Paste 5 pieces ₱ 44.00 ₱ 220.00

Haircap 10 pieces ₱ 25.00 ₱ 250.00
Trash Bags Large 5 packs ₱ 45.00 ₱ 225.00
Tissue 3 packs ₱ 250.00 ₱ 750.00
Sponge (12 pcs per pack) 2 packs ₱ 150.00 ₱ 300.00
Pot Holder Set (3 pieces per 2 sets ₱ 40.00 ₱ 80.00
set)
Oven Mittens 3 pieces ₱ 249.00 ₱ 747.00
Steel Wool (12 pcs per pack) 1 set ₱ 150.00 ₱ 150.00
Can Opener 3 pieces ₱ 150.00 ₱ 450.00
Total ₱ 3,172.00
Source: Bontoc Public Market and Family Mart

Table 3.16 Summary of Office and Store Supplies

Office and Store Supplies Quantity Unit Price Total Price

Bond paper (Long Bond 2 reams ₱ 300.00 ₱ 600.00

paper)

48
Ruler 2 pieces ₱ 12.00 ₱ 24.00
General Journal 1 piece ₱ 40.00 ₱ 40.00
Record Book 1 piece ₱ 96.00 ₱ 96.00
Columnar Book 1 piece ₱ 95.00 ₱ 95.00
Ballpen (1 box) 1 pack ₱ 155.00 ₱ 155.00
Stapler 2 pieces ₱ 90.00 ₱ 180.00
Staple Wire (per box) 10 boxes ₱ 20.00 ₱ 200.00
Fluorescent Bulb 5 pieces ₱ 150.00 ₱ 750.00
Official Receipt (5 booklets 10 booklets ₱ 1000.00 ₱ 2,000.00
for ₱ 1,000.00)
Expanding Folder 2 pieces ₱ 75.00 ₱ 150.00
Paper Bag 10 packs Small: Small:
₱ 81.00 ₱ 810.00
Medium: Medium:
₱ 162.00 ₱ 1,620.00
Large: Large:
₱ 212.00 ₱ 2,120.00
Total ₱ 8,841.00
Source: Bontoc Public Market, Bureau of Internal Revenue and Kimakim
School Supplies

Table 3.17 Summary of Maintenance Tools

Maintenance Tools Quantity Unit Price Total Price
Safety Padlock 3 pieces ₱ 120.00 ₱ 360.00
Bread Crates 10 pieces ₱ 200.00 ₱ 2,000.00
Pails Recycled cookie pails.
Dustpan and broom set 2 pieces ₱ 150.00 ₱ 300.00
Trash Bin 3 pieces ₱ 250.00 ₱ 750.00
Total ₱ 3,410.00
Source: Caranto Hardware, Kudkudong Trading, and Tiongsan Harrison, La
Trinidad

Table 3.18 Summary of Other Supplies

Other Supplies Quantity Unit Price Total Price
Basic Calculator 1 piece ₱ 250.00 ₱ 250.00
Wall Clock 2 pieces ₱ 120.00 ₱ 240.00

49
Scissors 3 pieces ₱ 20.00 ₱ 60.00
Total ₱ 550.00
Source: Kimakim School Supplies

F. BUILDING IMPROVEMENT CHARGED AS PREPAID RENT

Table 3.19 Prepaid Rent from Building Improvement
Project: Litangfan
Subject: Renovation
Date: As of January 2024
Lot Area: 20
Dev. Area:
No. of 5
Units:
Item Scope of Works Material Labor Total
III. Architectural Works
A. Site Development Works - - -
B. Masonry Works ₱53,436 ₱36,568 ₱90,004
C Tile Works 38,287 8,000 46,287
D Ceiling Works 31,831 6,260 38,091
E. Painting Works 11,624 18,961 30,585
F. Metal Works 9,120 6,080 15,200
G Doors, Jambs, and Hardware’s 32,480 2,000 34,480
H Windows, Aluminium, & Glass 38,040 25,360 63,400
Works
I Cabinetry Works 24,000 123,971 147,971
Sub-total "Architectural Works" ₱238,818 ₱227,200 ₱466,018
IV. Plumbing Works
A. Sewer line ₱3,305 ₱464 ₱3,769
B. Sanitary Line 821 440 1,261
C Miscellaneous 36,984 - 36,984
D Plumbing Fixtures 17,400 3,567 20,967
Sub-total "Plumbing Works" ₱58,510 ₱4,471 ₱62,981
V. Electrical Works
A. Service Entrance ₱40,866 ₱15,000 ₱55,866
B. Panel board Labour & Material 13,800 2,000 15,800

50
 Installation

C Lighting Fixtures 7,000 - 7,000

Sub-total "Electrical Works" ₱61,666 ₱17,000 ₱78,666
VI. Others ₱156,760 - ₱156,760
A. La Germania Cooktop (2 Gas / 1 42,000
Electric) H9021XG
B. La Germania Built-In Convection 27,000
Oven F969 D9X/12
C Royu Exhaust Fan 1,100
D First Alert Fire Extinguisher 1,360
2.5lbs
E. Smoke Detector Battery 6,300
Operated
F. Table 6,000
G Proofer 50,000
H Mixer 23,000
Total "Construction Budget" ₱557,754 ₱248,670 ₱764,425
Note: The building in which the operation will take place will be undergoing
improvement prior to the commencement of business activities. Table 3.19
provides a breakdown of the expenses associated with renovating the
business, which will be treated as prepaid rent.

G. OTHER RELATED COSTS

1. Taxes and Licenses
In order for the business to operate legally, Litangfan’s
Boundless Bakes
Table 3.20 Taxes and Licenses
Taxes and Licenses Amounts
Mayor’s Permit ₱ 1,500.00
Documentary Stamp ₱ 30.00
SEC Registration ₱ 500.00
Notarial Fee ₱ 200.00
Fire Code Inspection Fee ₱ 330.00
Sanitary Permit ₱ 200.00
Garbage Fee ₱ 50.00

51
 BIR Annual Registration ₱ 500.00
Barangay Clearance ₱ 50.00
Police Clearance ₱ 45.00
Business Tax ₱ 500.00
Total ₱ 3,905.00

2. Feasibility Cost
Before establishing the business, the company will spend a total
of ₱8,000.00 on a feasibility study. This research is required to
determine the strengths, weaknesses, demand, and supply of the
products that the firm will provide if the business is truly attainable.
Table 3.21 Feasibility Cost
Expenses Amounts
Materials (Papers and Printings) ₱ 5,000.00
Researcher’s Snacks and Meals ₱ 2,500.00
Transportation Expense ₱ 500.00
Total ₱ 8,000.00

3. Repairs and Maintenance

Since the business is concerned in the production, naturally
several equipment is involved. With this, there is a need to allot
sufficient fund for the equipment’s repairs and maintenance. Two
thousand pesos (₱2,000) will be allotted for the repairs of the office
equipment, and production facilities which will be done semi-annually.
The cost allocated will increase by following the projected inflation
rates each year.

Table 3.22 Repairs and Maintenance

Year Semi-annual No. of Semi- Estimated
Cost annual Per Repairs Per
Year Year
2025 ₱ 2,000.00 2 ₱ 4,000.00
2026 ₱ 4,155.60
2027 ₱ 4,317.25
2028 ₱ 4,485.19

52
 2029 ₱ 4,659.67
Note: The Repairs and Maintenance cost is assumed to increase in
following years following the projected inflation rate for subsequent
years, which is 3.89% as shown in the table on the next page.

Table 3.23 Inflation Rate

Inflation Rate
Prior Year Inflation Rate
2019 2.39%
2020 2.39%
2021 3.93%
2022 5.82%
2023 4.90%
Source: Bangko Sentral ng Pilipinas
Note:
The prior year’s inflation rates are used as basis in the
computation of the subsequent year’s inflation rates which results to
3.89%. This rate was used to increase the prices for the subsequent
years.
Computation:
Inflation rate for the subsequent years = Sum of inflation rates from 2018 to
2022 divide by 5 = (2.39%+2.39%+3.93%+5.82%+4.90%)/5 = 3.89%.

4. Electricity
Though the bakery will use LPG for baking, the other equipment,
such as the bread slicer, electric bag sealer, dough roller, industrial
dough mixer, and so on, will still require power to operate.
The proponents utilized MOPRECO's December 2023 electricity
per kilowatt hour rate of 9.1556 per kilowatt hour for the calculations.
Table 3.24 Annual Electricity Consumption
Year Annual Consumption
2025 ₱22,558.21
2026 ₱23,579.62
2027 ₱24,675.63
2028 ₱25,766.11
2029 ₱26,881.77
Please refer to Appendix K on Page 183 for the full computation.

53
 5. LPG
The business will be using gas oven for baking products. The
proponents estimated that the business will consume 4 tanks of LPG in
a month costing ₱989.71 per tank.

Table 3.25 LPG Expense

Consummation
Cost (per Cost per
Year per month
refill) year
(tank)
2025 4 ₱ 883.07 ₱42,387.12
2026 5 ₱ 917.42 ₱ 55,044.97
2027 6 ₱ 953.10 ₱ 68,623.47
2028 7 ₱ 990.18 ₱ 83,175.07
2029 8 ₱ 1,028.70 ₱ 98,754.95
LPG cost is assumed to increase every year by the projected inflation rates
for each year.

54
H. PRICES OF RAW MATERIALS
Table 3.26 Prices of Raw Materials
Raw Materials Price per Qty. Unit Price Per Unit
volume of 2024 2025 2026 2027 2028 2029
purchase
Flour (First Class) ₱750.00 25 kgs ₱30.00 ₱31.17 ₱32.38 ₱33.64 ₱34.95 ₱36.31
Flour (Third Class) ₱630.00 25 kgs ₱25.20 ₱26.18 ₱27.20 ₱28.26 ₱29.36 ₱30.50
Margarine ₱1,500.00 45 kg ₱33.33 ₱34.63 ₱35.98 ₱37.38 ₱38.83 ₱40.34
White Sugar ₱2,350.00 50 kgs ₱47.00 ₱48.83 ₱50.73 ₱52.70 ₱54.75 ₱56.88
Brown Sugar ₱1,900.00 50 kgs ₱38.00 ₱39.48 ₱41.01 ₱42.61 ₱44.27 ₱45.99
Eggs ₱160.00 30 pcs ₱5.33 ₱5.54 ₱5.76 ₱5.98 ₱6.21 ₱6.45
Yeast ₱2,110.00 10 kgs ₱211.00 ₱219.21 ₱227.74 ₱236.59 ₱245.8 ₱255.3
0 6
Salt ₱150.00 15 kgs ₱10.00 ₱10.39 ₱10.79 ₱11.21 ₱11.65 ₱12.10
Dubrim ₱130.00 1 kg ₱130.00 ₱135.06 ₱140.31 ₱145.77 ₱151.4 ₱157.3
4 3
CSP 60 ₱130.00 1 kg ₱130.00 ₱135.06 ₱140.31 ₱145.77 ₱151.4 ₱157.3
4 3
Peanut Butter ₱230.00 1 kg ₱230.00 ₱238.95 ₱248.24 ₱257.90 ₱267.9 ₱278.3
3 5
Shortening/ Lard ₱2,400.00 40 kgs ₱60.00 ₱62.33 ₱64.76 ₱67.28 ₱69.90 ₱72.61
Cocoa ₱80.00 3 kg ₱26.67 ₱27.70 ₱28.78 ₱29.90 ₱31.06 ₱32.27
Cornstarch ₱1,800.00 50 kg ₱36.00 ₱37.40 ₱38.86 ₱40.37 ₱41.94 ₱43.57
Evaporated Milk ₱1,300.00 50 L ₱26.00 ₱27.01 ₱28.06 ₱29.15 ₱30.29 ₱31.47
Cheese ₱45.00 2 kg ₱22.50 ₱23.38 ₱24.28 ₱25.23 ₱26.21 ₱27.23
Cinnamon Powder ₱300.00 1 kg ₱300.00 ₱311.67 ₱323.79 ₱336.39 ₱349.4 ₱363.0
8 7
Baking Powder ₱250.00 4 kg ₱62.50 ₱64.93 ₱67.46 ₱70.08 ₱72.81 ₱75.64
Bananas ₱70.00 1 kg ₱70.00 ₱72.72 ₱75.55 ₱78.49 ₱81.54 ₱84.72
Black Beans ₱300.00 1.50 kg ₱200.00 ₱207.78 ₱215.86 ₱224.26 ₱232.9 ₱242.0
8 5

55
Cooking Oil- Fiesta ₱1,100.00 17 kg ₱64.71 ₱67.22 ₱69.84 ₱72.55 ₱75.38 ₱78.31
Buko ₱50.00 2 pc ₱25.00 ₱25.97 ₱26.98 ₱28.03 ₱29.12 ₱30.26
Vanilla Extract ₱370.00 10 kg ₱37.00 ₱38.44 ₱39.93 ₱41.49 ₱43.10 ₱44.78
Ube ₱150.00 4 kg ₱37.50 ₱38.96 ₱40.47 ₱42.05 ₱43.68 ₱45.38

56
I. VOLUME OF PRODUCTION
Table 3.27 Annual Capacity per Piece (2025-2026)
No. of Total
No. of
Products per No. of
Units Annual
Product Production Batches
Produced Capacity
(Per Piece in a
in a Year
Basis) Year
Pandesal 210 156 32,760 29,484
Peanut Bread 177 156 27,612 24,851
Cinnamon Rolls 181 156 28,236 25,412
Cheese Rolls 164 156 25,584 23,026
Longjan 60 156 9,360 8,424
Buko roll 96 156 14,976 13,478
Butchi 185 156 28,860 25,974
Banana Muffins 197 156 30,732 27,659
Spanish Bread 188 156 29,328 26,395
Choco Roll 60 156 9,360 8,424
Pandecoco 168 156 26,208 23,587
Ube Bread 117 156 18,252 16,427
Mamon 80 156 12,480 11,232
Loaf 12 156 1,872 1,685
Grand Total 281,580 253,422

Table 3.28 Annual Capacity per Piece (2027-2029)

Product No. of Total No. of Annual
Products per No. of Units Capacity
Production Batches Produced
(Per Piece in a Year in a Year
Basis)
Pandesal 229 156 35,724 32,152
Peanut Bread 214 156 33,384 30,046
Cinnamon Rolls 299 156 46,644 41,980
Cheese Rolls 270 156 42,120 37,908
Longjan 99 156 15,444 13,900

57
Buko roll 158 156 24,648 22,183
Butchi 305 156 47,580 42,822
Banana Muffins 308 156 48,048 43,243
Spanish Bread 311 156 48,516 43,664
Choco Roll 99 156 15,444 13,900
Pandecoco 270 156 42,120 37,908
Ube Bread 193 156 30,108 27,097
Mamon 132 156 20,592 18,533
Loaf 19 156 2,964 2,668
Grand Total 433,056 389,750

58
J. FLOOR PLAN

Figure 3.27 Floor Plan

59
K. RISK MANAGEMENT PROCEDURES

These risk management procedure focuses on mitigating risks associated

with the quality control of the business.

1. Proper Storage of Raw Materials and Products

Establishing proper storage practices for raw materials and finished
products is essential to maintain their quality and prevent contamination.
The following measures will be implemented:
 A specific storage area is designated for raw materials and
finished products, ensuring proper temperature control,
ventilation, and protection from pests.
 Ingredient such as butter, fresh milk, perishable fruits, and other
raw materials must be kept in a fridge.
 In the inventory list, ingredients should be labeled carefully
including an expiry date. Similarly, the expiry date of the
finished products will be reflected in the packaging.
 Regular inspections and quality checks of incoming raw
materials to ensure they meet the required standards will be
conducted.
2. Maintenance of Machines
Proper maintenance of bakery machines is crucial to ensure
consistent product quality and prevent breakdowns. The following
measures will be implemented:
 The manufacturer’s maintenance instructions must be strictly
followed.
 The usage of the baking equipment is limited to three times
weekly, minimizing the risk of overuse and premature wear.
3. Safety Officer
Having a dedicated safety officer is essential to ensure compliance
with safety regulations and prevent any quality-related risks. The
following measures will be implemented:

60
 A safety officer with expertise in bakery operations will be
appointed to oversee safety protocols and quality control
measures.

61
4. Safety Hazard
 The fire extinguishers must be accessible in key locations.
Further, each extinguisher must be maintained and renewed
after expiration.
 Trainings on the safe operation of machinery, including proper
handling and maintenance must be provided to employees.
 Clear and visible instructions and warnings will be displayed
near machineries or equipment, emphasizing safe operating
practices.

62
MANAGEMENT ASPECT

The management aspect expresses a clear and precise identification of

obligations and responsibilities, manpower level requirements, and other key
factors essential in establishing a business. It encompasses a comprehensive
analysis of key personnel, including their salaries and other forms of
compensation, as well as the fundamental considerations involved in forming
the organization. This includes determining the form of ownership, creating
an organizational chart, and establishing a projected schedule. The primary
objective of the management aspect is to evaluate the effectiveness of the
organization's setup.

In order to attain this objective, effective planning by management is

pivotal. This involves leveraging human capital, financial expertise, and
emerging technologies to enhance competitiveness within the industry. This
stage of planning will also help to clarify the purpose of the business.

A. TYPE OF BUSINESS ORGANIZATION

Litangfan's Boundless Bakes has chosen to operate as a general

partnership, a business structure defined by a contractual agreement where
two or more individuals commit to contributing money, property, or industry
to a shared fund, with the profits distributed among them (Article 1767). The
decision to opt for a partnership stems from its capacity to leverage a more
extensive capital base compared to a sole proprietorship. Furthermore, the
presence of multiple general partners, each possessing diverse skill sets,
enhances overall business performance by bringing a broader range of
expertise to the venture. This organizational structure also results in
simplified tax filings, minimizing complexities associated with corporate tax
filings. Notably, a partnership avoids double taxation, a scenario often
encountered in corporations, allowing profits to flow directly to the owners.

The partnership will consist of four (4) capitalist partners, with one
designated as the managing partner. The managing partner assumes a

63
pivotal role, responsible for establishing goals and objectives, overseeing
daily operations, monitoring performance, and driving business growth. All
partners will contribute capital in the form of cash.

The following table outlines the capital structure of the business and
the individual capital contributions from each partner.

Table 3.29 Capital Structure

Share in the capital Amount of
Partner
contribution contribution
Capitalist Partner 25% ₱ 325,000.00
Capitalist Partner 25% ₱ 325,000.00
Capitalist Partner 25% ₱ 325,000.00
Capitalist Partner 25% ₱ 325,000.00

B. VISION, MISSION, GOALS, AND OBJECTIVES

The vision statement envisions the future state of the business, while
the mission statement outlines the present state, objectives, and specific,
measurable outcomes the company seeks to maintain as it expands. These
critical statements aid in aligning the resources of the organization towards a
prosperous future.

VISION: A premier bakery renowned for excellent products and satisfied

customers and driven for quality, cultural sensitivity, and innovation.

MISSION: Consistently deliver superior breads by utilizing premium

ingredients, innovative product development, and neighborly customer
service.

GOALS:

1. To maintain our current market share through strategic marketing

initiatives, brand building, and the introduction of new product lines.

64
2. To optimize operations and eliminate waste production while ensuring
sustainability and competitiveness.

3. To ensure employee retention through competitive compensation and

positive work environment.

4. To be economically and environmentally sensitive.

C. EMPLOYEE STAFFING

Staffing is a critical management function responsible for various

aspects of human resources management, including recruitment, selection,
development, training, and compensation. It's a continuous management
function that requires active participation by top management in most
businesses. Staffing is a crucial driver in any organization, enabling effective
and efficient execution of all other management functions.

1. Organizational Chart

The business has opted for a line organizational structure to

illustrate the chain of command and personnel hierarchy. This
structure ensures that authority flows vertically from the highest-
ranking executive to the lowest subordinate, while accountability
moves in the opposite direction, up the chain of command.

Presented below is the organizational chart for Litangfan’s

Boundless Bakes.

65
Capitalist Partner Capitalist Partner Capitalist Partner Capitalist Partner
Sharra Roda Mae Shamina Lynne Ciara Lyne O. Estephanie A.
B, Fagyan C, Peters Kesaed Nalibsan

Manager/
Salesperspn/
Cashier
Shamina Lyne
C. Peters

Part-time
Baker 1 Baker 2
Bookkeepper

Figure 3.28 Organizational Chart

2. Job Qualifications and Job Description

Job analysis is used to identify and assess the specific job duties
and requirements, as well as evaluate the relative significance of these
duties for a given position. This process is crucial in developing
effective plans, documenting the relevance of employment procedures
such as training, selection, compensation, and performance appraisal,
and establishing clear expectations for job performance.

Table 3.30 Job Qualifications and Job Descriptions

Job Title Job Description Job Qualifications
Managing  Supervises all the day-
Partner/ to-day operation of
Salesperson/ the business.
Cashier  Responsible for
planning, recruitment
and directing of
employees.
 Responsible for
authorization of the
purchase of
machineries,

66
 equipment, raw
materials and supplies
needed for business
operations.
 Deposits collections
and authorizes
disbursement
transactions.
 Responsible for tax
compliance of the
business and
employees.
 Entertains customers.
 Receive cash
payments and issues
receipts to customers.
 Serves as the safety
officer

Bakers  Performs skilled  A skilled baker.

baking work and  Has at least one
supervises the (1) year of
assistant/helper. experience in
 Prepares and bakes all baking.
products.
 Estimates baking
needs and keeps
records of products
made and used.
 Responsible for
packaging of breads.

Part-time  Maintains and keeps  Preferably a

Bookkeeper records of financial graduate of any

67
 transactions, reports business-related
and financial course.
documents of the  At least a holder
business. of Bookkeeping
 Prepares payroll and NCIII.
periodic financial
statements.

Litangfan’s Boundless Bakes will require employees which shall

comprise, a managing partner and two bakers, All of them shall be
responsible for the store’s daily operation and maintenance. The
employees are required to work every day except Sunday which serves
as their rest day. Litangfan’s Boundless Bakes will inquire about
accountant services from any of the accounting and auditing firms
existing within the locality of Bontoc.

D. EMPLOYEE BENEFITS

Employee benefits include various types of non-wage compensation

provided to employees in addition to their normal wages and salaries. The
main purpose of employee benefits is to increase the economic security of
staff members and improve worker retention across the organization. A solid
employee benefit package can help attract and retain talent (David, 2016).

The business will offer the following benefits to its employees.

1. Mandatory Employee Benefits:

a. Social Security System (SSS) is a policy of the state that provides
meaningful protection to members and their beneficiaries against the
hazards of disability, sickness, maternity, old age, death, and other
contingencies resulting in loss of income and financial burden. The
Government Service Insurance System is an equivalent system for
Philippine government employees.
Table 3.31 Projected Monthly SSS Contribution (All amounts in Philippine
Peso)
Employee Monthl Regular Social Security Employee's Total Total

68
 compensation
y Pay
ER EE Total ER EE Total ER EE

Manager/
Salesperson/ 11 1,
Cashier ,180 045 495 1,540 10 - 10 1,055 495 1,550

10 1,
Baker 1 ,790 045 495 1,540 10 - 10 1,055 495 1,550

10 1,
Baker 2 ,790 045 495 1,540 10 - 10 1,055 495 1,550

2
Bookkeeper ,000

34
TOTAL ,760 3,135 1,485 4,620 30 - 30 3,165 1,485 4,650

SSS Contribution is computed based on the SSS Contribution Table effective

January 2023. *Note: The bookkeeper is not qualified for the SSS contribution
because she/he is not a regular employee.
b. Home Development Mutual Fund (HDMF) is also called Pag-IBIG Fund
which is responsible for the administration of the national savings
program and affordable shelter financing for Filipinos.
c. Philippine Health Insurance Corporation (PhilHealth) is a program that
financially helps Filipinos with their medical expenses. Contributions
made by members and funding from both local and national
governments enable PhilHealth to operate and aid its contributing
members.
Table 3.32 Projected PhilHealth and HDMF Contribution (All amounts in
Philippine Peso)
Employee Monthly PhilHealth HDMF Total
Pay ER EE Total ER EE Total
Manager/ 11, 75
Salesperson/ 180 279.50 279.50 559 100 100 200 9
Cashier
Baker 1 10,790 269.75 269.75 539.5 100 100 200 739.50
0
Baker 2 10,790 269.75 269.75 539.5 100 100 200 739.50
0

69
 Bookkeeper 2,000
TOTAL 34,760 819 819 1,638 300 300 600 2,238

PhilHealth contribution is computed based on the PhilHealth Circular No.

2019-009.
Note: The bookkeeper is not qualified for the PhilHealth and HDMF
contributions because she/he is not a regular employee.

70
Table 3.33 Monthly Payroll and Employee Share
Employee Monthly Deductions Total Net
salary SSS PhilHealth HDMF deduction monthly
s salary
₱11,180. ₱495. ₱279. ₱10 ₱8 ₱10,30
Manager/Salesperson/Cashier
00 00 50 0.00 74.50 5.50
₱10,790. ₱495. ₱269. ₱10 ₱8 ₱9,92
Baker 1
00 00 75 0.00 64.75 5.25
₱10,790. ₱495. ₱269. ₱10 ₱8 ₱9,92
Baker 2
00 00 75 0.00 64.75 5.25
₱2,000.0 ₱2,00
Bookkeeper
0 0.00
₱34,760. ₱1,485. ₱819.0 ₱30 ₱ ₱42,68
TOTAL
00 00 0 0.00 2,604.00 6.00

Table 3.34 Employer Share in SSS, PhilHealth, HDMF

Employee Monthly PhilHealth HDMF SSS Monthly Annual share
salary Contributions EC share

Manager/
₱11,180. ₱279. ₱100. ₱1 ₱1,434.
Salesperson/ ₱17,214.
00 50 00 ₱1,045.00 0.00 50
Cashier 00
Baker 1 ₱10,790. ₱269. ₱100. ₱1 ₱1,424. ₱17,097.
00 75 00 ₱1,045.00 0.00 75 00
Baker 2 ₱10,790. ₱269. ₱100. ₱1 ₱1,424. ₱17,097.
00 75 00 ₱1,045.00 0.00 75 00
Bookkeeper ₱2,000.
-
00 -
TOTAL ₱4,284.0
₱34,760.00 ₱819.00 ₱300.00 ₱3,135.00 ₱30.00
0 ₱51,408.00

71
2. Employee Leaves

a. Maternity Leave
 Female workers will receive at least 105 days of paid maternity
leave for their first 4 pregnancies. This rises to 120 days in the
event of a Caesarean delivery or complications with the birth.
Single parents can have an extra 7 days of paid leave each year
to take care of their parental responsibilities. Additionally, workers
can apply for up to 30 days of unpaid leave.
b. Paternity Leave
 Male workers can have 7 days of paternity leave for the first four
pregnancies of their wives. Single parents can have an extra 7
days of paid leave each year to take care of their parental
responsibilities.
c. Sick Leave
 Ten (10) days per year for the additional two (2) years of service.
With additional one (1) sick leave every year starting the second
year of operation.
d. Vacation Leave
 Every employee is entitled to 13 days’ vacation leave each year.
Unused vacation leaves are not convertible into cash and are non-
cumulative.
e. Bereavement
 All employees are granted three (3) days leave with pay in the
event of death of an immediate family member which includes the
employee’s children, spouse, siblings, parents, grandparents, and
parents-in-law. The employees may extend but will not be
compensated for the extension days.
*Unused leaves are not convertible into cash and are non-cumulative.
3. Holiday Pays

The proposed business will be adopting the twelve-paid regular holiday

and the eight special holidays under Proclamation No. 368 dated October 11,
2023.

72
 The additional premium to be granted will be as follows:

Legal holiday pay = Additional 100% of the daily rate if worked; no

premium if not worked

Special holiday pay = Additional 30% of the daily rate if worked; no

premium if not worked

Table 3.35 List of Legal and Special Holidays

REGULAR HOLIDAYS: SPECIAL HOLIDAYS:

January 01 New Year’s Day February 10 Chinese New Year
March 28 Maundy Thursday March 30 Black Saturday
March 29 Good Friday August 21 Ninoy Aquino Day
April 09 Araw ng Kagitingan November 01 All Saint’s Day
May 01 Labor Day November 02 All Soul’s Day
June 12 Independence Day December 08 Feast of the
August 26 National Heroes Day Immaculate
November Bonifacio Day Conception of Mary
30
December Christmas Day December 24 Christmas Eve
25
December Rizal Day December 31 Last Day of the
30 Year
Note: Separate proclamations declaring national holidays for the observance
of Eid’l Fitr, the end of the month-long Ramadan, and Eid’l Adha, the Feast of
the Sacrifice, will follow after the National Commission on Muslim Filipinos
recommends to the Office of the President the dates of these Islamic
holidays, in accordance with the Islamic calendar or the lunar calendar.
Additionally, it's worth noting that the EDSA People Power Anniversary, which
the government usually declares as a holiday every February 25, is not on
the list for 2024. Malacañang clarified that February 25 falls on a Sunday,
which is already a non-working day, and hence, it was not declared a holiday.

73
74
Table 3.36 Regular and Special Holiday Pay
Employee Regular Regular Special No. of No. of No. of Total annual
wage holiday holiday regular regula special pay
worked worked working r holiday
(200%) (130%) days holida
y

Manager/

Salesperson/ ₱430.00 ₱860.00 ₱559.00 294 12 8 ₱141,212.00

Cashier

Baker 1 ₱415.00 ₱830.00 ₱539.50 294 12 8 ₱136,286.00

Baker 2 ₱415.00 ₱830.00 ₱539.50 294 12 8 ₱136,286.00

Bookkeeper ₱24,000.00

TOTAL ₱1,260.0 ₱2,520.0 ₱1,638.0 ₱437,784.00

0 0 0

Notes:
 The regular holiday worked is 200% of the regular wage. Sample
computation: ₱430.00*200% = ₱860.00
 The special holiday worked is 130% of the regular wage. Sample
computation: ₱430.00*130% = ₱559.00
 Total annual pay is the sum of the annual regular pay, annual regular
holiday worked, and annual special holiday worked. Sample
computation = [(₱430.00*294)+( ₱860.00*12)+( ₱559.00*8)] =
₱141,212.00

4. Other Benefits
a. Thirteenth Month Pay – Employees with at least one (1) year of
service to the business will receive a full bonus equivalent to one (1)
month basic salary.
Table 3.37 Projected 13th-month pay

Monthly 13th-month
Employee
salary pay

Manager/Salesperson/Cashier ₱11,180.00 ₱11,180.00

Baker 1 ₱10,790.00 ₱10,790.00
Baker 2 ₱10,790.00 ₱10,790.00
Bookkeeper ₱2,000.00 -
TOTAL ₱ 34,760.00 ₱32,760.00

75
b. Christmas Bonus – Each employee is entitled to receive a Christmas
bonus amounting to P2,000.00 every third week of December.

76
5. Night Shift Differential Pay
An additional compensation of 10% of the regular hourly rate will be
given to the employees for each hour of work performed between 10PM to
6AM. This will be applicable to the bakers.

6. Overtime Pay
Employees are entitled to overtime pays with rates which will
depend on what type of day when overtime occurs.

Regular Work Day = 25% of the hourly rate

Regular/Special Holidays/Rest Day = 30% of the hourly rate

77
E. PAYROLL

Table 3.38 Projected Annual Salary

Employee Daily Monthl Monthly Total Annual Paid Paid 13th- Christmas Total Total Net Annual
wage y basic night shift monthly salary regular special month bonus Annual deducti Salary
salary differentia salary holiday holiday pay Salary on
l worked worked

Manager/ ₱1 ₱1 ₱ ₱1 ₱2,00 ₱16 ₱1

Salesperson/ 1,180 1,180 ₱134,160 10,320 1,180 0 2,132 61,257.50
₱430 - ₱4,472
₱874.50
Cashier

Baker 1 ₱1 ₱ ₱1 ₱1 ₱2,00 ₱16 ₱1

0,790 405 1,195 ₱134,336 ₱9,960 0,790 0 1,402 60,536.75
₱415 ₱4,316 ₱864.75

Baker 2 ₱1 ₱ ₱1 ₱1 ₱2,00 ₱16 ₱1

0,790 405 1,195 ₱134,336 ₱9,960 0,790 0 1,402 60,536.75
₱415 ₱4,316 ₱864.75

Bookkeeper ₱ ₱ ₱2,00 ₱2 ₱
2,000 2,000 0 6,000 26,000
- - ₱24,000 - - -

TOTAL

₱3 ₱ ₱3 ₱ ₱13,10 ₱3 ₱8,0 ₱51 ₱5

₱1,260 4,760 809 5,569 ₱426,831 30,240 4 2,760 00 0,935 ₱2,604 08,331

78
E. MANAGEMENT STYLE

Management styles describe the method a person uses to manage an

individual or group of people or organization to support the needs and goals.
The proposed business will be adopting the Affiliation and Democratic
Management Style.

In affiliate management style, also called the ‘people-come-first’ style

which aims to put employees first. They pay close attention to and support
the emotional and professional needs to employees. Ultimately, this style
focuses on encouraging harmony and forming peaceful, collaborative
relationships within the organization.

Democratic management style is based on the philosophy that two

heads are better than one. This style encourages idea-sharing and employee
participation which helps employees feel valued and heard however the
manager retains the final decision-making authority. Moreover, it has the
objective of promoting harmony among employees.

F. BUSINESS POLICIES AND REGULATIONS

Business policies are guidelines that help the business deal with the
health, safety, and accountability of the employees, as well as their
interactions with customers. They can also be used as a guideline for federal
or state regulatory requirements, legal issues, and other situation that can
lead to severe consequences for employees.

PERSONNEL:

1. Recruitment, Screening, and Hiring

The recruitment, screening, and hiring of employees will be
based on the job description and job qualification set by the
management for each specific position. The manager will be
responsible for recruiting and hiring of employees.
The following requirements that the applicant needs to submit will
be as follows:
 Application Letter

79
  Resume
 2 original copies of 2x2 identification pictures
 Police Clearance
 PSA Birth Certificate
 Certification
 Medical Certificate
2. Employment Process
a. Applicants will pass an application form or resume with a 2x2
colored photo to the management.
b. The management will screen the application from and will
schedule interviews with selected applicants.
c. The applicant, who passed the interview, will be given a list of
requirements for hiring.
d. The management will process the needed requirements for
hiring and the applicants will be scheduled for orientation
together with other applicants.
3. Working Hours
The proposed business will operate from Mondays to Saturdays
or six (6) days a week. It will be open for from 6AM to 7PM. Every
employee will be working eight hours per day.

Table 3.39 Employee Schedule

AM PM
Personnel 3:0 4:0 5:0 6:0 7:0 8:0 9:0 10:0 11:0 12:0 1:0 2:0 3:0 4:0 5:0 6:0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Manager/
Salesperson/
Cashier

Baker 1

Baker 2

Bookkeeper

Note: The colored cells represent the working hours of the employees.

If an employee is hired, he/she will become a regular employee.

Regular employees are required to time-in and time-out for their hour
of work to serve as basis for the computation of their salaries/wages.

80
 An employee may work undertime provided that he/she will
inform the manager, and that the manager authorized him/her to
leave. Undertime work on any particular day shall not be offset by
overtime work on any other day (Art. 88, Labor Code).

4. Employee Uniform and Grooming

 Uniforms bearing the business logo will be given as the business
uniform and paired with any desired pants. Uniforms are
required during working hours to distinguish them from the
customers.
 The bakers and the helper are to wear an apron and hair net
during business hours.
Table 3.40 Uniform

Personnel Quantity Unit Price Total

Manager/Salesperson/
Cashier 2 ₱ 350.00 ₱ 700.00
Baker 1 2 ₱ 350.00 ₱ 700.00
Baker 2 2 ₱ 350.00 ₱ 700.00
Helper/Delivery
Personnel 2 ₱ 350.00 ₱ 700.00
Bookkeeper - - -
Total 8 ₱ 1,400.00 ₱ 2,800.00

81
 Figure 3.29 Sample uniform (no collar)

Figure 3.30 Sample uniform (with collar)

5. Compensation and Other Benefits
 Pay Period – employees shall receive their basic monthly
compensation pay every last business day of the month.
 13th-month pay – all employers are required to pay their rank-
and-file employees thirteenth-month pay, regardless of the
nature of their employment and irrespective of the methods by
which their wages are paid, provided they worked for at least
one (1) month during a calendar year. The thirteenth-month pay
should be given to the employees not later than December 24 of
every year. The thirteenth-month pay shall not be less than one-
twelfth of the total basic salary earned by an employee in the
calendar year.
6. Employee Resignations
 Employees planning to resign from their job must inform the
management and submit a resignation letter at least one (1)
month in advance before its effectiveness for personnel
replacement.
7. Leave and Absences

82
  As stated under employee benefits, the employees are entitled
to leaves however, they must inform the other partners three (3)
days before the desired date.
 Emergency leave must be given notice as soon as possible. In
addition, leave extensions are to be informed as well.
 In cases of unreasonable or unnecessary absences, there will be
a deduction on daily wages equivalent to such absences.
8. Substance Abuse or Cause of Termination
 The proposed business shall not tolerate the use of illegal
substances, alcohol, and tobacco products during working hours.
Meanwhile, some other grounds that would lead to termination
of employees would include serious misconduct, gross and
habitual neglect by the employee of his duties, fraud or willful
breach of trust, violation of company rules and regulations, theft
of property, incompetence, and inefficiency or ineptitude.
9. Deposit of Collection
 The collection of the week shall be deposited every Saturday.
10. Seminar and Training
 All the employees of the proposed business will undergo the
mandatory 8-hours Safety and Health Seminar for Workers under
Section 16 or RA 11058 (an act strengthening the compliance
with occupational safety and health standards and providing
penalties for violations thereof) and Section 3 of DO 198-18
(Department Order Implementing Rules and Regulations of RA
11058) at the amount of ₱3,000.00.
PRODUCTION:

1. Cleanliness
 Wearing protective clothing and gloves is a must;
 Employees with wounds or illnesses must secure clearances
from management before returning to work;
 Smoking and drinking alcohol are strictly prohibited in the
working area.
2. Storage and Storage Keeping

83
  Ingredient such as butter, fresh milk, perishable fruits, and other
raw materials must be kept in a fridge.
 In the inventory list, ingredients should be labeled carefully
including an expiry date.

3. Security
 The storage room should be locked, and access restricted to
authorized personnel only.
4. Ventilation
 Mechanical ventilation should be working and used.
5. Lighting
 Electrical lighting should allow a view into all area.
6. Inventory and Record Keeping
 Inventory should be properly recorded as inventory is added or
removed from storage.

FINANCE:

Litangfan’s Boundless Bakes will also make financial guidelines on

approaches for different financial transactions, which are meant to be
followed by the personnel and staff. These policies will be the guidelines that
the management will use to administer the business operations. For the
reason creating finance policies is effective and have a long-term effect on
the business, reviews on these guidelines are important. Furthermore,
adjustments and innovation can be needed in case of obsolete financial
regulations.

a. Finance Authorization Policy

All financial transactions need to be authorized by the persons in
charge before making the transactions take place. The management
ensures that business assets are free from fraud and theft by its
employees and safeguarding of assets is established through finance
authority personnel.
Table 3.41 Finance Authorization Policy

84
 Transaction Authorizing Personnel
Financial Transaction Managing Partner
Authorizing New Suppliers Managing Partner
Bank Accounts Managing Partner

Since we have a managing partner, she will be the person who is

authorized to do all transactions of the business even without the
confirmation of other partners. As stated in Article 1800, the partner who has
been appointed manager in the article of partnership may execute all acts of
administration despite the opposition of his partners, unless he should act in
bad faith wherein the power is irrevocable without just and lawful cause.
CODE OF ETHICS:

Company procedures and policies establish the rules of conduct within

an organization, outlining the responsibilities of both the employees and
employers.

Each member of the organization should take attention to the policies

and rules regarding:

1. People and Safety

Human resources is our most critical asset and hence the
people, their safety and how they conduct themselves are of utmost
importance.
a. Rules in Determining Compensable Working Hours
The basis of the minimum wage rates prescribed by the law shall be
the normal working hours of eight (8) hours a day.
ii. Hours worked: The following shall be considered compensable
hours worked:
 All time during which an employee is required to be on
duty or to be at the employer’s premises or to be at a
prescribed workplace; and
 All time during which an employee is suffering or permitted
to work.

85
 iii. Principles in determining hours worked. The following general
principles shall govern in determining whether the time spent by
an employee is considered hours worked.
iv. All hours are hours worked which the employee is required to
give his employer, regardless of whether such hours are spent in
productive labor or involve physical or mental exertion.
v. An employee need not leave the premises of the workplace so
that his rest period shall not be counted, it is enough that he
stops working, may rest completely, and may leave his
workplace, to go elsewhere, whether within or outside the
premises of his workplace.
vi. If the work performed was necessary, or it benefited the
employer, or the employee could not abandon his work at the
end of his normal working hours because he had no
replacement, all time spent on such work shall be considered as
hours worked if the work were with the knowledge of his
employer or immediate supervisor.
vii. The time during which an employee is inactive because of
interruptions in his work beyond his control shall be considered
working time either if the imminence of the resumption of work
requires the employee’s presence at the place of work or if the
interval is too brief to be utilized effectively and gainfully in the
employee’s interest.
2. Hygiene and Sanitation
An unpleasant smell and unsanitary look are a big “no-no” for
customers and greatly affect the reputation of the business. Thus,
employees should always possess good hygiene. For the hairstyle, men
should have well-trimmed black hair while for women with long hair,
they must tie their hair. Furthermore, cutting fingernails, using
deodorant regularly, and brushing teeth are necessary especially when
dealing with the food production business.
3. Arrival and Departure of Employees
All employees must sign in to the respective logbook for
attendance.

86
 4. Environment, Health, and Safety
The business is committed to providing a safe and healthy
working environment for our employees and to avoiding adverse
impacts and injury to the environment and the communities in which
we do business. We should strive to conserve resources and reduce
waste and emissions through recycling and other energy conservation
measures.
5. Harassment
Any unwelcome, undesirable, and uninvited behavior, whether
verbal or physical, which interferes with work or creates an
intimidating, hostile, dangerous, or offensive work environment would
be construed as harassment. Litangfan’s Boundless Bakes strives to
provide a work environment that is free from harassment of any kind
and/or any other offensive or disrespectful conduct.
a. Produce for Notice
Managing partner will conduct a meeting with employees
regarding changes in the way of management and notices. Meetings
can be conducted during the breaktime of the employees.
COMPANY INFORMATION AND ASSETS:

1. Confidential Information
While there is no set definition of confidential information, it may
include but is not limited to, business plans, financial information, sales
data, etc. We must ensure maintenance concerning the confidentiality
of sensitive information entrusted to us by the company, our client,
and suppliers, except when disclosures are authorized by appropriate
levels, or disclosure is legally mandated.

2. Use of company assets and properties

We must comply with all security programs to safeguard such
assets against unauthorized use or removal, as well as against loss by
act or breach of trust. Litangfan’s Boundless Bakes assets should be
used for legitimate business purposes only and these assets may not
be used for personal benefits, sold, loaned, given away, or disposed of

87
 without proper authorization. Permitting any such property to be
damaged, lost, or used in an authorized manner is strictly prohibited.
LAWS, REGULATION, AND INTERACTION WITH THE GOVERNMENT:

1. Bribery and Corruption

Litangfan’s Boundless Bakes have a zero-tolerance approach to
bribery and corruption and is committed to acting professionally, fairly,
and with integrity in all our relationships and business dealings
wherever we operate and to implementing and enforcing effective
systems to counter bribery. We should not offer, directly or indirectly,
any form of gift, entertainment, or anything of value to any
government official or his/her representatives to obtain or retain
business or secure an unfair advantage.

2. Compliance with Laws and Regulations

Litangfan’s Boundless Bakes shall be compliant with several
laws and regulations in all areas we conduct business.
3. Political Contribution and Activities
Litangfan’s Boundless Bakes shall not take part in political
activities or make any donations to political parties or their
representatives.

88
SOCIO-ECONOMIC ASPECT

This section of the study emphasizes the firm's responsibility to

consider socio-economic factors that are fundamental to its business
operations. These factors include its accountability towards the improvement
of its workforce, which encompasses both their professional and personal
growth, its responsibility towards its customers, and its moral obligation
towards the economy. The socio-economic aspect intends to evaluate the
benefits that the business provides to its customers, identify the methods by
which the business supports its employees' behavioral and personal
development, and recognize the contributions that the business makes
towards achieving economic progress while being mindful of the communities
in which it operates.

To establish a business, it's imperative to identify and analyze the

various stakeholders. This assists in comprehending the business's value and
feasibility in a given location. It's essential to understand their preferred
communication methods, needs, and expectations to ensure fruitful
collaboration. Moreover, identifying different groups of stakeholders
facilitates a comprehensive understanding of the business's positive or
negative impact on the external environment.

In relation, the Litangfan’s Boundless Bakes in Fato, Guina-ang,

Bontoc, Mountain Province shall presume the socio-economic responsibility
that it is in quest of. The business will remain adaptable and responsive to
changing economic and social conditions and will address any issues that
may arise as a result of its establishment and operations. It seeks to establish
sustainable relationships with its stakeholders, recognizing that the
business's success is not solely for its benefit, but for the benefit of all parties
involved, whether they participate actively, passively, or both. In fulfilling its
socio-economic responsibilities, Litangfan's Boundless Bakes seeks to
prioritize the following areas: government, employees, customers, and the
community.

89
A. GOVERNMENT

Government is the backbone of the society. It provides regulations,

guidelines and provisions that govern or control the public including
business entities. However, in order to efficiently impose its regulations, it
needs a fund which is provided by its constituents.

Putting up a business benefits the government in many ways. The

business generates income and part of which is forwarded to the
government as tax. Tax will help the government generate funds for the
improvement of public service and government projects.

Litangfan’s Boundless Bakes will conform to government policies,

tax rules and those regulations imposed by the local government
regarding business compliance such as processing of appropriate business
requirements, paying a significant portion of all taxes, including income
tax, property tax, employment tax, and all others.

In addition to fulfilling its tax obligations, Litangfan's Boundless is

committed to actively contributing to the Local Government Unit's
initiatives in solid waste management. This commitment involves the
donation of utilized containers, such as containers of butter. These
containers, once donated, will find practical applications within
educational institutions, serving as receptacles for various purposes,
including but not limited to utilization as pails and pots for plants.
B. EMPLOYEES

Members in an organization are the greatest strength of the

business since they take an essential part in every business’ operation. In
this regard, Litangfan’s Boundless Bakes will be composed of honest,
hardworking, competitive and passionate employees in order to provide
the best possible services to the community.

In turn, the employees will be given just compensation and benefits

in compliance with the Labor Code of the Philippines, based on reasonable
work-hours. The management will provide SSS premium, PhilHealth

90
 premium, 13th-month pay, holiday pay, maternity leave, paternity leave,
and other benefits.

C. CUSTOMER

Business with a local focus has the advantage of cultivating a loyal

customer base, especially when their products/services are not threatened
by big industry players in the area. While this may not influence company
growth, it ensures a certain level of financial sustainability, and helps to
ensure that the business maintains a positive reputation.

Litangfan's Boundless Bakes is dedicated to delivering quality

products at affordable prices. In line with this commitment, our business
extends the convenience of enjoying our delectable offerings directly at
our premises, eliminating the need for customers to undertake lengthy
journeys for their baked goods. This strategic approach is designed to
ensure that the freshness of our products remains uncompromised,
enhancing the overall satisfaction of our valued customers.
D. COMMUNITY

One of the advantage of businesses in the local economy is the

boost in economy is the boost in employment in the locality, along with
the standard-of-living that increases inherently in raising local
employment.

Furthermore, Litangfan’s Boundless Bakes is dedicated to

environmental caring and preservation. Accordingly, it will educate and
train employees to help them consider the environment in all aspects of
their work. The business will be adapting the 3Rs in waste management –
reduce, reuse, recycle, in order to reduce the overall amount of waste that
is produced.

CULTURAL PRESERVATION

The bakery can contribute to the preservation and promotion of

local culture and traditions. For example, it can incorporate traditional
Filipino ingredients, flavors, and baking techniques into its products,
thereby preserving culinary heritage and supporting local artisans.

91
92
SOCIAL INCLUSION

The bakery can actively promote social inclusion by providing

employment opportunities to marginalized groups, such as individuals
with disabilities or those from disadvantaged backgrounds. This can
contribute to reducing inequality and promoting diversity within the
workforce.

93
FINANCIAL ASPECT
The financial aspect quantifies the feasibility of the business through
the financial statements. This contains the projected financial statements of
Litangfan Boundless Bakes for five years and their financial analysis. This
aspect provides a clear understanding on whether the business is profitable
or not.

94
 LITANGFAN BOUNDLESS BAKES
Projected Statements of Financial Position
As of December 31,2025, 2026, 2027, 2028 and 2029
(All amounts in Philippine Peso)

Notes Pre-Operation 2025 2026 2027 2028 2029

Current Assets
Cash and Cash Equivalents 3 40,133 213,613 344,995 653,042 868,538 1,137,915
Inventories- Raw Materials 4 18,255 52,216 70,898 86,564 101,732 110,291
Inventories- Finished Goods 5 7,603 18,612 32,782 50,997 74,331
Prepaid Rent 6 764,425 687,982 611,540 535,097 458,655 382,212
Kitchen Supplies 7 3,472 174 200 220 242 266
Office and Store Supplies 8 8,841 442 508 560 616 678
Total Current Assets 835,125 962,030 1,046,753 1,308,264 1,480,780 1,705,694
Non-Current Assets
Office Equipment (net) 9 54,369 44,583 34,796 25,010 15,223 5,437
Kitchen Equipment (net) 10 277,589 252,164 315,039 281,667 248,295 214,923
Furniture and Fixtures (net) 11 64,198 58,420 52,642 46,865 41,087 35,309
Tools and Utensils (net) 12 20,891 15,751 10,612 8,411 8,377 6,181
Maintenance Tools (net) 13 4,010 3,288 2,566 1,845 1,123 401
Total Non-Current Assets 421,057 374,206 415,656 363,797 314,105 262,251
TOTAL ASSETS 1,256,182 1,336,236 1,462,409 1,672,061 1,794,884 1,967,945
Current Liabilities
SSS,PhilHealth and HDMF Payable 14 - 7,961 7,961 7,961 7,961 7,961
Income Tax Payable 15 - 3,522 7,349 12,313 19,049 22,184
Percentage Tax Payable 16 - 10,195 12,213 14,764 17,818 20,957
Withholding Tax Payable 17 - 569 569 569 569 569
Total Liabilities - 22,246 28,093 35,607 45,396 51,671
Partner's Equity
Fagyan, Capital 314,046 328,497 358,579 409,113 437,372 479,069
Kesaed, Capital 314,046 328,497 358,579 409,113 437,372 479,069
Nalibsan, Capital 314,046 328,497 358,579 409,113 437,372 479,069
Peters, Capital 314,046 328,497 358,579 409,113 437,372 479,069
Total Equity 1,256,182 1,313,990 1,434,316 1,636,454 1,749,488 1,916,274
TOTAL LIABILITIES AND EQUITY 1,256,182 1,336,236 1,462,409 1,672,061 1,794,884 1,967,945

95
 LITANGFAN BOUNDLESS BAKES
Projected Statements of Comprehensive Income
For the Years Ended December 31, 2025, 2026, 2027, 2028 and 2029
(All amounts in Philippine Peso)

Notes Pre-Operation 2025 2026 2027 2028 2029

Net Sales 18 - 1,359,357.00 1,628,465.36 1,968,571.24 2,375,731.00 2,794,296.70
Less: Cost of Goods Sold 19 - 810,207.76 991,644.10 1,211,504.70 1,468,778.98 1,808,945.95
Gross Income - 549,149.24 636,821.26 757,066.53 906,952.02 985,350.75
Add: Interest Income 20 - 1,463.06 2,734.85 5,124.17 8,255.51 11,846.84
Total Income 550,612.30 639,556.11 762,190.70 915,207.54 997,197.60
Less: Expenses
SSS,PhilHealth and HDMF Expense 21 - 51,408.00 51,408.00 51,408.00 51,408.00 51,408.00
Salaries Expense 22 - 187,257.50 187,257.50 187,257.50 187,257.50 187,257.50
Advertising Expense 23 14,800.00 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00
Taxes and Licenses 24 3,905.00 45,104.45 53,285.35 63,624.57 76,002.22 88,726.62
Depreciation Expense- Office Equipment 25 - 9,786.42 9,786.42 9,786.42 9,786.42 9,786.42
Depreciation Expense- Furniture and Fixtures 26 - 5,777.82 5,777.82 5,777.82 5,777.82 5,777.82
Depreciation Expense-Kitchen Equipment 27 - 25,425.04 25,425.04 33,372.04 33,372.04 33,372.04
Depreciation Expense- Tools and Utencils 28 - 5,139.34 5,139.34 5,189.70 5,248.27 5,300.58
Depreciation Expense- Maintenance Supplies 29 - 721.80 721.80 721.80 721.80 721.80
Other Supplies Expense 30 800.00 - - - - -
Office and Store supplies Expense 31 8,841.00 8,398.95 9,658.70 10,645.08 11,710.90 12,882.35
Kitchen Supplies Expense 32 3,472.00 3,298.40 3,793.92 4,181.60 4,599.98 5,059.80
Utilities Expense 33 - 22,558.21 23,579.62 24,675.63 25,766.11 26,881.77
Repairs and Maintenance 34 - 4,000.00 4,155.60 4,317.25 4,485.19 4,659.67
Rent Expense 35 - 76,442.46 76,442.46 76,442.46 76,442.46 76,442.46
Training Fees 36 4,000.00 5,800.00 5,800.00 5,800.00 5,800.00 5,800.00
Uniform Expense 37 - 2,800.00 2,800.00 2,800.00 2,800.00 2,800.00
Transportation Expense 38 - 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00
Professional fees 39 - 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Feasibility Cost 40 8,000.00 - - - - -
Total Expenses 43,818.00 478,718.39 489,831.56 510,799.86 525,978.71 541,676.82
Net Income(Loss) before Tax - 43,818.00 71,893.91 149,724.55 251,390.84 389,228.82 455,520.77
Less: Tax Expense 41 - 14,086.17 29,397.94 49,253.34 76,194.66 88,734.79
Net Income(Loss) after Tax - 43,818.00 57,807.74 120,326.61 202,137.51 313,034.16 366,785.99

96
 LITANGFAN BOUNDLESS BAKES
Projected Statement of Owner's Equity
Pre-operation
(All amounts in Philippine Peso)

Fagyan Kesaed Nalibsan Peters Total

Partners Capital, beg. 325,000.00 325,000.00 325,000.00 325,000.00 1,300,000.00
Add: Profit/ Loss Distribution - 10,954.50 - 10,954.50 - 10,954.50 - 10,954.50 - 43,818.00
Total 314,045.50 314,045.50 314,045.50 314,045.50 1,256,182.00
Less: Partners Withdrawal - - - - -
Partners Capital, end. 314,045.50 314,045.50 314,045.50 314,045.50 1,256,182.00

LITANGFAN BOUNDLESS BAKES

Projected Statement of Owner's Equity
For the Year Ended December 31, 2025
(All amounts in Philippine Peso)

Fagyan Kesaed Nalibsan Peters Total

Partners Capital, beg. 314,045.50 314,045.50 314,045.50 314,045.50 1,256,182.00
Add: Profit/ Loss Distribution 14,451.94 14,451.94 14,451.94 14,451.94 57,807.74
Total 328,497.44 328,497.44 328,497.44 328,497.44 1,313,989.74
Less: Partners Withdrawal - - - - -
Partners Capital, end. 328,497.44 328,497.44 328,497.44 328,497.44 1,313,989.74

97
 LITANGFAN BOUNDLESS BAKES
Projected Statement of Owner's Equity
For the Year Ended December 31, 2026
(All amounts in Philippine Peso)

Fagyan Kesaed Nalibsan Peters Total

Partners Capital, beg. 328,497.44 328,497.44 328,497.44 328,497.44 1,313,989.74
Add: Profit/ Loss Distribution 30,081.65 30,081.65 30,081.65 30,081.65 120,326.61
Total 358,579.09 358,579.09 358,579.09 358,579.09 1,434,316.36
Less: Partners Withdrawal - - - - -
Partners Capital, end. 358,579.09 358,579.09 358,579.09 358,579.09 1,434,316.36

LITANGFAN BOUNDLESS BAKES

Projected Statement of Owner's Equity
For the Year Ended December 31, 2027
(All amounts in Philippine Peso)

Fagyan Kesaed Nalibsan Peters Total

Partners Capital, beg. 358,579.09 358,579.09 358,579.09 358,579.09 1,434,316.36
Add: Profit/ Loss Distribution 50,534.38 50,534.38 50,534.38 50,534.38 202,137.51
Total 409,113.47 409,113.47 409,113.47 409,113.47 1,636,453.87
Less: Partners Withdrawal - - - - -
Partners Capital, end. 409,113.47 409,113.47 409,113.47 409,113.47 1,636,453.87

98
 LITANGFAN BOUNDLESS BAKES
Projected Statement of Owner's Equity
For the Year Ended December 31, 2028
(All amounts in Philippine Peso)

Fagyan Kesaed Nalibsan Peters Total

Partners Capital, beg. 409,113.47 409,113.47 409,113.47 409,113.47 1,636,453.87
Add: Profit/ Loss Distribution 78,258.54 78,258.54 78,258.54 78,258.54 313,034.16
Total 487,372.01 487,372.01 487,372.01 487,372.01 1,949,488.03
Less: Partners Withdrawal 50,000.00 50,000.00 50,000.00 50,000.00 200,000.00
Partners Capital, end. 437,372.01 437,372.01 437,372.01 437,372.01 1,749,488.03

LITANGFAN BOUNDLESS BAKES

Projected Statement of Owner's Equity
For the Year Ended December 31, 2029
(All amounts in Philippine Peso)

Fagyan Kesaed Nalibsan Peters Total

Partners Capital, beg. 437,372.01 437,372.01 437,372.01 437,372.01 1,749,488.03
Add: Profit/ Loss Distribution 91,696.50 91,696.50 91,696.50 91,696.50 366,785.99
Total 529,068.50 529,068.50 529,068.50 529,068.50 2,116,274.01
Less: Partners Withdrawal 50,000.00 50,000.00 50,000.00 50,000.00 200,000.00
Partners Capital, end. 479,068.50 479,068.50 479,068.50 479,068.50 1,916,274.01

99
 LITANGFAN'S BOUNDLESS BAKES
Projected Statement of Cash Flows
For the Years Ended December 31, 2025, 2026, 2027, 2028, and 2029
(All amounts in Philippine Peso)

Pre-operation 2025 2026 2027 2028 2029

CASH FLOWS FROM OPERATING ACTIVITIES
Net Income(Loss) - 43,818.00 57,807.74 120,326.61 202,137.51 313,034.16 366,785.99
Add(Deduct):
Depreciation Expense-Kitchen Tools - 5,139.34 5,139.34 5,189.70 5,248.27 5,300.58
Depreciation Expense-Kitchen Equipment - 25,425.04 25,425.04 33,372.04 33,372.04 33,372.04
Depreciation Expense- Office Equipment - 9,786.42 9,786.42 9,786.42 9,786.42 9,786.42
Depreciation Expense- Furniture and Fixtures - 5,777.82 5,777.82 5,777.82 5,777.82 5,777.82
Depreciation Expense- Maintenance Supplies - 721.80 721.80 721.80 721.80 721.80
Inc/ Dec in Inventories- Raw Materials - 18,255.00 - 33,961.11 - 18,681.57 - 15,666.00 - 15,168.04 - 8,559.43
Inc/ Dec in Inventories- Finished Goods - - 7,602.61 - 11,009.65 - 14,169.34 - 18,215.61 - 23,334.14
Inc/ Dec in Kitchen Supplies - 3,472.00 3,298.40 - 26.08 - 20.40 - 22.02 - 24.20
Inc/ Dec in Office and Store Supplies - 8,841.00 8,398.95 - 66.30 - 51.92 - 56.10 - 61.65
Inc/ Dec in Prepaid Rent - 764,424.59 76,442.46 76,442.46 76,442.46 76,442.46 76,442.46
Inc/ Dec in SSS,PhilHealth and HDMF Payable - 7,961.20 - - - -
Inc/ Dec in Percentage Tax Payable - 10,195.18 2,018.31 2,550.79 3,053.70 3,139.24
Inc/ Dec in Income Tax Payable - 3,521.54 3,827.94 4,963.85 6,735.33 3,135.03
Inc/ Dec in Withholding Tax Payable - 568.51 - - - -
Net Cash Provided(Used) by Operating Activities - 838,810.59 173,480.68 219,682.14 311,034.72 420,710.23 472,481.95
CASH FLOWS FROM INVESTING ACTIVITIES
Office Equipment (net) - 54,369.00 - - - - -
Kitchen Equipment (net) - 277,589.00 - - 88,300.00 - - -
Furniture and Fixtures (net) - 64,198.00 - - - - -
Tools and Utensils (net) - 20,890.75 - - - 2,988.66 - 5,214.24 - 3,104.91
Maintenance Tools (net) - 4,010.00 - - - - -
Net Cash Provided(Used) by Investing Activities - 421,056.75 - - 88,300.00 - 2,988.66 - 5,214.24 - 3,104.91
CASH FLOWS FROM FINANCING ACITIVITIES
Investments 1,300,000.00 - - - - -
Withdrawals - - - - 200,000.00 200,000.00
Net Cash Provided(Used) by Financing Activities 1,300,000.00 - - - - 200,000.00 - 200,000.00
Net Increase/ (Decrease) In Cash 40,132.66 173,480.68 131,382.14 308,046.07 215,495.99 269,377.03
Cash, Beginning - 40,132.66 213,613.34 344,995.48 653,041.55 868,537.54
CASH,END 40,132.66 213,613.34 344,995.48 653,041.55 868,537.54 1,137,914.57

100
 Litangfan’s Boundless Bakes
Notes to Projected Financial Statement
For The Years Ended December 31, 2025, 2026, 2027, 2028, and
2029
(All amounts in Pesos)
Note 1: Reporting Entity

Litangfan’s Boundless Bakes is a general partnership business to be

established in Guina-ang, Bontoc, Mountain Province that offers variety of
baked bread, providing convenience and satisfaction to every customer.

Note 2: Basis of Preparation

Statement of Compliance

The accompanying financial statements have been prepared in

compliance with Philippine Financial Reporting Standards (PFRS). PFRS are
based on International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB). PFRS consists of
PFRS, Philippine Accounting Standards (PAS), and Philippine Interpretations
issued by the Philippine Financial Reporting Standards Council (FRSC).

Use of Estimates

The preparation of the financial statements in conformity with the PFRS

requires management to make estimates and assumptions that affect the
reporting amounts of assets and liabilities and disclosures of related amounts
at the date of the reporting date and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.

Property Estimated Useful Life

Office Equipment 5 years
Furniture and Fixtures 10 years
Machinery 10 years
Other Machineries and Equipment 10 years
Other Property, Plant and Equipment 5 years

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The useful life in years of property and equipment is based on the provision
of New Government Accounting System (NGAS).

Note 3. Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, petty cash and
cash in bank, highly liquid investments with an original maturity of three
months or less, which are readily convertible to known amounts of cash and
are subject to an insignificant risk of changes in value. Cash and Cash
Equivalents as defined in IAS 7comprises the following:
Note 3: Cash and Cash Equivalents
Pre-Operation 2025 2026 2027 2028 2029
Cash on Hand 26,141.48 31,316.64 37,857.14 45,687.13 53,736.48
Petty 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Cash in Bank 40632,66 182,471.86 308,678.84 610,184.41 817,850.40 1,079,178.09
Cash and Cash Equivalents 40,132.66 213,613.34 344,995.48 653,041.55 868,537.54 1,137,914.57

Pre-Operation 2025 2026 2027 2028 2029

Sales - 1,359,357.00 1,628,465.36 1,968,571.24 2,375,731.00 2,794,296.70
Divided by: Number of Operating days - 312 312 312 312 312
Average Daily Cash Balance - 4,356.91 5,219.44 6,309.52 7,614.52 8,956.08
Multiplied by No. of days undeposited - 6 6 6 6 6
Cash on Hand - 26,141.48 31,316.64 37,857.14 45,687.13 53,736.48

Pre-Operation 2025 2026 2027 2028 2029

Beginning Cash in Bank - 40,632.66 244,120.45 454,824.84 853,059.18 1,374,968.87
Add: Net Increase in Cash in Bank 40,632.66 203,487.79 210,704.39 398,234.34 521,909.69 598,576.37
Cash in Bank before interest income 40,632.66 244,120.45 454,824.84 853,059.18 1,374,968.87 1,973,545.24
Add: Net Interest Income 1,464.72 2,728.95 5,118.36 8,249.81 11,841.27
Cash in Bank, end 40632,66 182,471.86 308,678.84 610,184.41 817,850.40 1,079,178.09

Note 4: Inventory-Raw Materials

Inventory is measured at cost upon initial recognition. Costs incurred in

bringing each product to its present location are accounted for as Raw
Materials and Finished Goods.

After initial recognition, inventory is measured at the lower of cost and

net realizable value. Net realizable value is the estimated selling price in the
ordinary course of operations, less the estimated costs of completion and the
estimated costs necessary to make the sale, exchange, or distribution.

Inventory as defined in PAS 2 comprises the following:

Note 4: Inventory- Raw Materials

Pre-Operation 2025 2026 2027 2028 2029
Materials, beg 18,255.00 52,216.11 70,897.68 86,563.68 101,731.72
Add: Purchases* 18,255.00 490,484.41 517,956.74 764,797.11 794,547.71 821,908.23
Materials Available for Use 18,255.00 508,739.41 570,172.85 835,694.78 881,111.39 923,639.95
Less: Materials Used - 456,523.31 499,275.18 749,131.10 779,379.67 813,348.79
Raw Materials, end 18,255.00 52,216.11 70,897.68 86,563.68 101,731.72 110,291.16
*See Appendix T on page 251 for the detailed computation of purchases.

102
Note 5: Inventory-Finished Goods

Inventory is measured at cost upon initial recognition. Costs incurred in

bringing each product to its present location are accounted for as Raw
Materials and Finished Goods

After initial recognition, inventory is measured at the lower of cost and

net realizable value.Net realizable value is the estimated selling price in the
ordinary course of operations, less the estimated costs of completion and the
estimated costs necessary to make the sale, exchange, or distribution.

Inventory as defined in PAS 2 comprises the following:

Pre-
Operatio 2025 2026 2027 2028 2029
n
7,602.6 18,612.2 32,770. 50,99
Finished Goods, beg - 1 7 06 7.21
Add: Cost of Goods Manufactured 734,677. 900,605.0 1,103,159. 1,339,095. 1,650,75
during the year 18 1 69 88 3.17
Total Finished Goods 734,677. 908,207.6 1,121,771. 1,371,865. 1,701,75
Available for Sale 18 2 96 95 0.38
727,074. 889,595.3 1,088,990. 1,320,868. 1,627,41
Less: Cost of Goods Sold 57 5 35 73 9.02
Inventory- Finished 7,602 18,612. 32,781. 50,99 74,3
Goods, end .61 27 61 7.21 31.36

Note 6: Prepaid Rent

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029 is as follows:

Note 6: Prepaid Rent

Pre-Operation 2025 2026 2027 2028 2029
Prepaid Rent, beg. 764,424.59 764,424.59 687,982.13 611,539.67 535,097.21 458,654.75
Less: Annual Rent* - 76,442.46 76,442.46 76,442.46 76,442.46 76,442.46
Prepaid Rent, end 764,424.59 687,982.13 611,539.67 535,097.21 458,654.75 382,212.29
See Appendix R, Page 224 for the computation of leasehold improvement w hich serve as the prepaid rent as agreed on the contract.
Annual Rent is computed by dividing the leasehold improvement over the lease term ( 10 years).

Note 7: Kitchen Supplies

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029 is as follows:

103
Note 7: Kitchen Supplies
Pre-Operation 2025 2026 2027 2028 2029
Kitchen Supplies, beg - 3,472.00 173.60 199.68 220.08 242.10
Add: Purchases 3,472.00 - 3,820.00 4,202.00 4,622.00 5,084.00
Total Supplies Availble for Use 3,472.00 3,472.00 3,993.60 4,401.68 4,842.08 5,326.10
Less: Supplies expense - 3,298.40 3,793.92 4,181.60 4,599.98 5,059.80
Kitchen Supplies, end 3,472.00 173.60 199.68 220.08 242.10 266.31
Five percent(5%) of the supplies available for use are expected to be unused at year end. Purchase of supplies are increased by 10% every year.

104
Note 8: Office and Store Supplies

The account consists of the available stocks/inventory in the stock

room or the unconsumed portion of purchased office and store supplies. The
composition of the account as of December 31, 2025; 2026; 2027; 2028 and
2029 is as follows:

Note 8: Office and Store Supplies

Pre-Operation 2025 2026 2027 2028 2029
Office Supplies, beg - 8,841.00 442.05 508.35 560.27 616.36
Add: Purchases 8,841.00 - 9,725.00 10,697.00 11,767.00 12,944.00
Total Supplies Available for Use 8,841.00 8,841.00 10,167.05 11,205.35 12,327.27 13,560.36
Less: Office and store supplies expense - 8,398.95 9,658.70 10,645.08 11,710.90 12,882.34
Office and Store Supplies, end 8,841.00 442.05 508.35 560.27 616.36 678.02
*See Technical Aspect , Page 43 for computation of office supplies and Appendix P on Page 207 for the detailed items of office supplies.

Note 9: Office Equipment

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029 is as follows:

Note 9: Office Equipment

Pre-Operation 2025 2026 2027 2028 2029
Office Equipment, beg 54,369.00 54,369.00 54,369.00 54,369.00 54,369.00 54,369.00
Less: Accumulated Depreciation - 9,786.42 19,572.84 29,359.26 39,145.68 48,932.10
Office Equipment (Net) 54,369.00 44,582.58 34,796.16 25,009.74 15,223.32 5,436.90
*See Technical Aspect , Page 41 for computation of office equipment and Appendix P on Page 193 for the detailed items of office equipment.

Note 10: Kitchen Equipment

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029 is as follows:

Note 10: Kitchen Equipment

Pre-Operation 2025 2026 2027 2028 2029
Kitchen Equipment, beg 277,589.00 277,589.00 365,889.00 365,889.00 365,889.00 365,889.00
Less: Accumulated Depreciation - 25,425.00 50,850.00 84,222.04 117,594.08 150,966.12
Kitchen Equipment (Net) 277,589.00 252,164.00 315,039.00 281,666.96 248,294.92 214,922.88
*See Technical Aspect , Page 41 for computation of kitchen equipment and Appendix P on Page 194 for the detailed items of kitchen equipment.

Note 11: Furniture and Fixtures

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029 is as follows:

Note 11: Furniture and Fixtures

Pre-Operation 2025 2026 2027 2028 2029
Furnitures and Fixtures, beg 64,198.00 64,198.00 64,198.00 64,198.00 64,198.00 64,198.00
Less: Accumulated Depreciation - 5,777.82 11,555.64 17,333.46 23,111.28 28,889.10
Furnitures and Fixtures, (Net) 64,198.00 58,420.18 52,642.36 46,864.54 41,086.72 35,308.90
*See Technical Aspect , Page 42 for computation of furniture and fixtures and Appendix P on Page 197 for the detailed items of furniture and fixtures.
105
Note 12: Tools and Utensils

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029 is as follows:

Note 12: Tools and Utensils

Pre-Operation 2025 2026 2027 2028 2029
Cost
Beginning Tools and Utensils - 20,890.75 20,890.75 20,890.75 23,879.41 29,093.65
Add: Purchases 20,890.75 - - 2,988.66 5,214.24 3,104.91
Total Cost 20,890.75 20,890.75 20,890.75 23,879.41 29,093.65 32,198.56
Less: Accumulated Depreciation - 5,139.34 10,278.68 15,468.38 20,716.65 26,017.23
Total 20,890.75 15,751.41 10,612.07 8,411.03 8,377.00 6,181.33
*See Technical Aspect , Page 42 for computation of tools and utensils and Appendix P on Page 199 for the detailed items of tools and utensils.

Note 13: Maintenance Tools

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029 is as follows:

Note 13: Maintenance Tools

Pre-Operation 2025 2026 2027 2028 2029
Maintenance Equipment, beg 4,010.00 4,010.00 4,010.00 4,010.00 4,010.00 4,010.00
Less: Accumulated Depreciation - 721.80 1,443.60 2,165.40 2,887.20 3,609.00
Maintenance Tools (Net) 4,010.00 3,288.20 2,566.40 1,844.60 1,122.80 401.00
*See Technical Aspect , Page 44 for computation of maintenance tools and Appendix P on Page 210 for the detailed items of maintenance tools.

Note 14: SSS, PAG-IBIG and HDMF Payable

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 14: SSS, PAG-IBIG, and HDMF Payable

Pre-Operation 2025 2026 2027 2028 2029
Employee Share - 3,099.00 3,099.00 3,099.00 3,099.00 3,099.00
Employer Share - 4,862.20 4,862.20 4,862.20 4,862.20 4,862.20
SSS, PAG-IBIG, and HDMF Payable - 7,961.20 7,961.20 7,961.20 7,961.20 7,961.20

Note 15: Income Tax Payable

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 15: Income Tax Payable

Pre-Operation 2025 2026 2027 2028 2029
Income Tax Expense - 14,086.17 29,397.94 49,253.34 76,194.66 88,734.79
Divide: Quarters - 4 4 4 4 4
Income Tax Payable - 3,521.54 7,349.49 12,313.33 19,048.67 22,183.70

106
Note 16: Percentage Tax Payable

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 16: Percentage Tax Payable

Pre-Operation 2025 2026 2027 2028 2029
Sales - 1,359,357.00 1,628,465.36 1,968,571.24 2,375,731.00 2,794,296.70
Multiply by: Percentage tax rate - 3% 3% 3% 3% 3%
Annual Percentage Tax - 40,780.71 48,853.96 59,057.14 71,271.93 83,828.90
Divide by: Quarter - 4 4 4 4 4
Percentage Tax Payable - 10,195.18 12,213.49 14,764.28 17,817.98 20,957.23

Note 17: Withholding Tax Payable

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 17: Withholding Tax Payable

Pre-Operation 2025 2026 2027 2028 2029
Professional Fees - 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Monthly Rent - 6,370.20 6,370.20 6,370.20 6,370.20 6,370.20
Total - 11,370.20 11,370.20 11,370.20 11,370.20 11,370.20
Multiply by: Withholding Percentage - 5% 5% 5% 5% 5%
Withholding Tax Payable - 568.51 568.51 568.51 568.51 568.51

Note 18: Sales

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 18: Sales

Pre-Operation 2025 2026 2027 2028 2029
Sales from Individuals - 645,261.00 691,111.60 747,427.64 807,079.26 843,937.01
Sales from Store Owners - 714,096.00 937,353.76 1,221,143.60 1,568,651.74 1,950,359.69
Total Sales - 1,359,357.00 1,628,465.36 1,968,571.24 2,375,731.00 2,794,296.70
*See Appendix J , Page 176 for the detailed computation of Sales.

107
Note 19: Cost of Goods Sold

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 19: Cost of Goods Sold

Product Pre-Operation 2025 2026 2027 2028 2029
Pandesal - 66,367.69 86,347.70 103,627.98 128,458.37 155,063.74
Peanut Bread - 83,589.72 100,837.77 126,902.14 154,841.73 192,253.38
Cinnamon Rolls - 72,502.47 94,732.92 112,262.77 137,579.38 171,517.46
Cheese Bread - 73,607.06 83,795.12 108,070.16 126,807.39 153,751.66
Longjan - 44,731.79 47,552.60 51,647.96 55,989.98 60,591.65
Buko roll - 53,930.51 57,652.42 62,425.88 66,607.06 71,929.58
Butchi - 65,702.61 79,549.31 100,505.50 122,971.70 153,076.18
Banana Muffins - 46,018.62 62,766.99 78,358.92 96,277.91 123,267.79
Spanish Bread - 65,136.30 86,216.72 102,589.52 127,138.88 160,187.69
Choco Roll - 36,783.15 40,033.73 42,536.29 46,154.99 49,990.86
Pandecoco - 99,337.34 119,834.78 150,809.47 184,012.64 227,624.58
Ube Bread - 48,304.29 62,729.15 78,203.18 101,556.61 133,642.40
Mamon - 47,165.53 61,250.33 82,722.86 105,773.27 137,359.81
Loaf - 7,030.70 8,344.55 10,842.07 14,609.05 18,689.16
Cost of Goods Sold - 810,207.76 991,644.10 1,211,504.70 1,468,778.98 1,808,945.95
*For the detailed computation of Cost of Goods Sold, see Appendix W on page 255.

Note 20: Interest Income

Litangfan’s Boundless Bakes deposits its earnings and cash at the

TreasureLink Cooperative-Bontoc Branch which has a 1.5% per annum
interest rate. The composition of the account as of December 31, 2025; 2026;
2027; 2028 and 2029, is as follows:

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 20: Interest Income

Pre-Operation 2025 2026 2027 2028 2029
Cash in Bank, beg 40,632.66 244,120.45 454,824.84 853,059.18 1,374,968.87
Cash in Bank before interest income 40,632.66 203,487.79 210,704.39 398,234.34 521,909.69 598,576.37
Total Cash in Bank before interest 40,632.66 244,120.45 454,824.84 853,059.18 1,374,968.87 1,973,545.24
Divided by: - 2 2 2 2 2
Average Cash in Bank - 122,060.23 227,412.42 426,529.59 687,484.44 986,772.62
Multiply by: Interest Rate - 1.50% 1.50% 1.50% 1.50% 1.50%
Gross Interest Income - 1,830.90 3,411.19 6,397.94 10,312.27 14,801.59
Less: Final Tax - 366.18 682.24 1,279.59 2,062.45 2,960.32
Net Interest Income - 1,464.72 2,728.95 5,118.36 8,249.81 11,841.27

Note 21: SSS, PHILHealth and HDMF Expense-ER Share

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:
Note 21: SSS, PHILHealth, and HDMF Expenses-ER Share
Pre-Operation 2025 2026 2027 2028 2029
SSS, PHILHealth, and HDMF Expenses 51,408.00 51,408.00 51,408.00 51,408.00 51,408.00
*Please see Table 3.34 on page 62 for the detailed computation of Employer share.

108
Note 22: Salaries Expense
The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 22: Salaries Expense

Pre-Operation 2025 2026 2027 2028 2029
Manager - 161,257.50 161,257.50 161,257.50 161,257.50 161,257.50
Bookkeeper - 26,000.00 26,000.00 26,000.00 26,000.00 26,000.00
Total Salaries Expense - 187,257.50 187,257.50 187,257.50 187,257.50 187,257.50
*Salaries on the bakers are not included for the computation of salaries expense as they are part of the manufacturing cost as direct labor.

Note 23: Advertising Expense

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 23: Advertising Expense

Pre-Operation 2025 2026 2027 2028 2029
Tarpaulin 1,800.00 - - - - -
Signage 1,000.00 - - - - -
Business Card 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00
Advertising Expense 14,800.00 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00

Note 24: Taxes and Licenses

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 24: Taxes and Licenses

Pre-Operation 2025 2026 2027 2028 2029
Percentage Tax Expense - 40,780.71 48,853.96 59,057.14 71,271.93 83,828.90
Mayor's Permit 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00
DTI Registration 500.00 500.00 500.00 500.00 500.00 500.00
Fire Permit 330.00 330.00 330.00 330.00 330.00 330.00
Sanitary Permit 200.00 200.00 200.00 200.00 200.00 200.00
Notarial Fee 200.00 200.00 200.00 200.00 200.00 200.00
Garbage Fee 50.00 50.00 50.00 50.00 50.00 50.00
BIR Annual Registration 500.00 500.00 500.00 500.00 500.00 500.00
Barangay Clearance 50.00 - - - - -
Documentary Stamp 30.00 - - - - -
Business Tax* 500.00 1,043.74 1,151.39 1,287.43 1,450.29 1,617.72
Police Clearance 45.00 - - - - -
Total 3,905.00 45,104.45 53,285.35 63,624.57 76,002.22 88,726.62
*Business tax is computed as P500.00 basic tax plus P2.00 per P5,000 of gross sales. (Municipal Ordinance #316 S. 2020- Municipal Tax Ordinance)

Note 25: Depreciation Expense – Office Equipment

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

109
Note 25: Depreciation Expense- Office Equipment
Pre-Operation 2025 2026 2027 2028 2029
Annual Depreciation- Computer - 6,988.50 6,988.50 6,988.50 6,988.50 6,988.50
Annual Depreciation- Printer - 1,826.10 1,826.10 1,826.10 1,826.10 1,826.10
CCTV - 621.00 621.00 621.00 621.00 621.00
Digital Vault - 350.82 350.82 350.82 350.82 350.82
Depreciation Expense- Office Equipment - 9,786.42 9,786.42 9,786.42 9,786.42 9,786.42
*See Appendix L, Page 185 for the detailed computation of depreciation expenses.

Note 26: Depreciation Expense – Furniture and Fixtures

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 26: Depreciation expense- Furnitures and Fixtures

Pre-Operation 2025 2026 2027 2028 2029
Annual Depreciation-Glass Display Cabinet 4 decks - 2,160.00 2,160.00 2,160.00 2,160.00 2,160.00
Annual Depreciation-Stainless Table - 575.82 575.82 575.82 575.82 575.82
Annual Depreciation-Cooling Rack - 927.00 927.00 927.00 927.00 927.00
Annual Depreciation-Office Table - 540.00 540.00 540.00 540.00 540.00
Annual Depreciation-Uratex Monoblock - 135.00 135.00 135.00 135.00 135.00
Annual Depreciation-5- Layer Open Shelf Cabinet - 1,440.00 1,440.00 1,440.00 1,440.00 1,440.00
Depreciation Expense- Furnitures And Fixtures - 5,777.82 5,777.82 5,777.82 5,777.82 5,777.82

Note 27: Depreciation Expense – Kitchen Equipment

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 27: Depreciation Expense- Kitchen Equipment

Pre-Operation 2025 2026 2027 2028 2029
Gas Deck Oven (3 decks 6 tray) - 11,277.00 11,277.00 11,277.00 11,277.00 11,277.00
Gas Deck Oven (2 decks 4 tray) - 7,947.00 7,947.00 7,947.00
Refrigerator (Fujidenzo) - 1,777.50 1,777.50 1,777.50 1,777.50 1,777.50
Kalan - 225.00 225.00 225.00 225.00 225.00
Loaf Slicer - 1,898.10 1,898.10 1,898.10 1,898.10 1,898.10
Dough Roller - 2,906.91 2,906.91 2,906.91 2,906.91 2,906.91
Electric Bag Sealer - 369.00 369.00 369.00 369.00 369.00
Commercial Dough Mixer - 5,157.00 5,157.00 5,157.00 5,157.00 5,157.00
Gas Tank - 475.20 475.20 475.20 475.20 475.20
Regulator - 108.00 108.00 108.00 108.00 108.00
Stainless Banca - 477.00 477.00 477.00 477.00 477.00
Exhaust Fan - 252.90 252.90 252.90 252.90 252.90
Fire Extinguisher - 501.43 501.43 501.43 501.43 501.43
Depreciation Expense- Kitchen Equipment - 25,425.04 25,425.04 33,372.04 33,372.04 33,372.04

Note 28: Depreciation Expense-Tools and Utensils

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

110
Note 28: Depreciation Expense- Tools and Utensils
Pre-Operation 2025 2026 2027 2028 2029
Basin - 270.00 270.00 280.50 280.50 291.41
Dough Cutter - 156.94 156.94 163.04 163.04 169.38
Liquid Measuring Cup - 117.00 117.00 121.55 121.55 126.28
Silicon Brush Set - 251.10 251.10 260.87 260.87 271.02
Spoon Set - 58.50 58.50 60.78 60.78 63.14
Flour Sifter - 441.00 441.00 458.15 458.15 475.98
Knife Set - 689.40 689.40 689.40 716.22 716.22
Measuring Spoon Set - 90.00 90.00 90.00 93.50 93.50
Measurin Cup Set - 120.00 120.00 120.00 124.67 124.67
Rolling Pin - 538.80 538.80 538.80 559.76 559.76
Tongs - 67.50 67.50 67.50 70.13 70.13
Non- Stick Baking Pan - 289.80 289.80 289.80 289.80 289.80
Loaf Pan Set - 307.80 307.80 307.80 307.80 307.80
Flat Sheet Pan - 270.00 270.00 270.00 270.00 270.00
Weighing Scale - 90.00 90.00 90.00 90.00 90.00
24 Cup Mini Muffin Pan - 301.50 301.50 301.50 301.50 301.50
Round Pan - 810.00 810.00 810.00 810.00 810.00
Wooden Bread Paddle - 216.00 216.00 216.00 216.00 216.00
Collander - 54.00 54.00 54.00 54.00 54.00
Depreciation Expense-Tools and Utensils - 5,139.34 5,139.34 5,189.70 5,248.27 5,300.58

Note 29: Depreciation Expense – Maintenance Supplies

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 29: Depreciation Expense- Maintenance Tools

Pre-Operation 2025 2026 2027 2028 2029
Safety Padlock - 64.80 64.80 64.80 64.80 64.80
Bread Crates - 414.00 414.00 414.00 414.00 414.00
Pails - 108.00 108.00 108.00 108.00 108.00
Dustpan and broom set - 135.00 135.00 135.00 135.00 135.00
Trash Bin - - - - - -
Depreciation Expense- Maintenance Tools - 721.80 721.80 721.80 721.80 721.80

Note 30: Other Supplies Expense

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 30: Other Supplies Expense

Pre-Operation 2025 2026 2027 2028 2029
Basic Calculator 500.00 - - - - -
Wall Clock 240.00 - - - - -
Scissors 60.00 - - - - -
Other Supplies Expense 800.00 - - - - -

Note 31: Office and Store Supplies Expense

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

111
Note 31: Office and Store Supplies Expense
Pre-Operation 2025 2026 2027 2028 2029
Beginning Office Supplies - 8,841.00 442.05 508.35 560.27 616.36
Add: Purchases 8,841.00 - 9,725.00 10,697.00 11,767.00 12,944.00
Supplies Available for Use 8,841.00 8,841.00 10,167.05 11,205.35 12,327.27 13,560.36
Less: Ending Supplies - 442.05 508.35 560.27 616.36 678.02
Office and Store Supplies Expense 8,841.00 8,398.95 9,658.70 10,645.08 11,710.90 12,882.35

Note 32: Kitchen Supplies Expense

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 32: Kitchen Supplies Expense

Pre-Operation 2025 2026 2027 2028 2029
Beginning Kitchen Supplies - 3,472.00 173.60 199.68 220.08 242.10
Add: Purchases 3,472.00 - 3,820.00 4,202.00 4,622.00 5,084.00
Supplies Available for Use 3,472.00 3,472.00 3,993.60 4,401.68 4,842.08 5,326.10
Less: Ending Supplies - 173.60 199.68 220.08 242.10 266.31
Kitchen Supplies Expense 3,472.00 3,298.40 3,793.92 4,181.60 4,599.98 5,059.80

Note 33: Utilities Expense- Electricity

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 33: Utililties Expense- Electricity

Pre-Operation 2025 2026 2027 2028 2029
Utilities Expense- Electricity - 22,558.21 23,579.62 24,675.63 25,766.11 26,881.77

Note 34: Repairs and Maintenance

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 34: Repairs and Maintenance

Pre-Operation 2025 2026 2027 2028 2029
Repairs and Maintenance Expense - 4,000.00 4,155.60 4,317.25 4,485.19 4,659.67

Note 35: Rent Expense

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 35: Rent Expense

Pre-Operation 2025 2026 2027 2028 2029
Rent Expense - 76,442.46 76,442.46 76,442.46 76,442.46 76,442.46

112
Note 36: Training Fees
The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 36: Training Fees

Pre-Operation 2025 2026 2027 2028 2029
Bread and Pastry Production NC II 4,000.00 - - - - -
Occupational Safety and Health Training - 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Fire Safety Training - 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Work Environment Measurement Training - 1,800.00 1,800.00 1,800.00 1,800.00 1,800.00
Training Fees 4,000.00 5,800.00 5,800.00 5,800.00 5,800.00 5,800.00

Note 37: Uniform Expense

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 37: Uniform Expense

Pre-Operation 2025 2026 2027 2028 2029
Uniform Expense - 2,800.00 2,800.00 2,800.00 2,800.00 2,800.00

Note 38: Transportation Expense

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 38: Transportation Expense

Pre-Operation 2025 2026 2027 2028 2029
Tranportation fare - 150.00 150.00 150.00 150.00 150.00
Multiply by: No. of weeks - 52 52 52 52 52
Transportation Expense - 7,800.00 7,800.00 7,800.00 7,800.00 7,800.00

Note 39: Professional Fee

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 39: Professional Fee

Pre-Operation 2025 2026 2027 2028 2029
Annual Financial Statement - 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Professional Fee - 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00

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Note 40: Feasibility Cost

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 40: Feasibility Cost

Pre-Operation 2025 2026 2027 2028 2029
Materials (Papers and printings) 5,000.00 - - - - -
Researcher's Snacks, Meals 2,500.00 - - - - -
Transportation Expense 500.00 - - - - -
Feasibility Cost 8,000.00 - - - - -

Note 41: Income Tax Expense

The composition of the account as of December 31, 2025; 2026; 2027; 2028
and 2029, is as follows:

Note 41: Income Tax Expense

Pre-Operation 2025 2026 2027 2028 2029
Net Income Before Tax - 71,893.91 149,724.55 251,390.84 389,228.82 455,520.77
Less: Interest Income - 1,463.06 2,734.85 5,124.17 8,255.51 11,846.84
Net Taxable Income - 70,430.85 146,989.70 246,266.68 380,973.31 443,673.93
Multiply By: - 20% 20% 20% 20% 20%
Total Annual Income Tax - 14,086.17 29,397.94 49,253.34 76,194.66 88,734.79

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FINANCIAL STATEMENT ANALYSIS

Financial statement analysis is the process of extracting information

from financial statements to better understand a company’s current and
future performance and financial condition.

A. Liquidity Ratio/Solvency

The current ratio is a liquidity ratio that measures a company's

capacity to meet short-term obligations with a one-year maturity. In the year
2025, according to the current ratio computed above, for every one peso of
liability, there are ₱43.24 of current assets to pay them. In the years 2026,
2027, 2028 and 2029, the current ratio is 37.26, 36.72, 32.62 and 33.01,
respectively. This indicates that the business has an increasing current ratio,
which means that each year, there are more current assets to pay the
current liability. Therefore, this concludes that the business is highly liquid.

Current Ratio/ Solvency 2025 2026 2027 2028 2029

Current Asset 962,029.84 1,046,753.12 1,308,264.39 1,480,779.69 1,705,693.70
Divided by: Current Liabilities 22,246.43 28,092.69 35,607.33 45,396.36 51,670.63
Current Ratio/ Solvency 43.24 37.26 36.74 32.62 33.01

Inventory turnover measures the efficiency of the firm in managing

and selling inventory.

Inventory Turn-over Ratio 2025 2026 2027 2028 2029

Cost of Goods Sold 810,207.76 991,644.10 1,211,504.70 1,468,778.98 1,808,945.95
Divide by: Average Inventory* 2,534.20 6,553.72 12,848.47 20,941.82 31,332.14
Inventory Turn-over Ratio 319.71 151.31 94.29 70.14 57.73

*Average Inventory 2025 2026 2027 2028 2029

Finished Goods Inventory, beg - 7,602.61 18,612.27 32,770.06 50,997.21
Add:Finished Goods Inventory, end 7,602.61 18,612.27 32,781.61 50,997.21 74,331.36
Total 7,602.61 26,214.88 51,393.87 83,767.28 125,328.57
Divided by: 3 4 4 4 4
Average Inventory 2,534.20 6,553.72 12,848.47 20,941.82 31,332.14

Working capital is a financial metric that is the difference between a

company’s current assets and current liabilities. As a financial metric,
working capital helps plan for the future. Litangfan Boundless Bakes has a
high working capital wherein during 2025, there is ₱939, 783.41 working

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capital, which increased in 2026 until 2029. This may indicate that the
Litangfan’s Boundless Bakes business can fund its operations and meet short-
term obligations. It can continue to pay its employees and suppliers and meet
other obligations, such as taxes. Further, this fund can also be used for
business growth without incurring debt.

Working Capital Ratio 2025 2026 2027 2028 2029

Current Assets 962,029.84 1,046,753.12 1,308,264.39 1,480,779.69 1,705,693.70
Less: Current Liabilities 22,246.43 28,092.69 35,607.33 45,396.36 51,670.63
Working Capital 939,783.41 1,018,660.44 1,272,657.07 1,435,383.33 1,654,023.07

B. Long-term Financial Stability Leverage

Debt to Equity Ratio 2025 2026 2027 2028 2029

Total Liabilities 22,246.43 28,092.69 35,607.33 45,396.36 51,670.63
Divided by: Total partner's equity 1,256,182.00 1,313,989.74 1,434,316.36 1,636,453.87 1,749,488.03
Debt to Equity Ratio 0.02 0.02 0.02 0.03 0.03

The debt-to-equity ratio measures the riskiness of the firm’s capital

structure in terms of the relationship between the funds supplied by creditors
and investors. In the year 2025, Litangfan’s Boundless Bakes debt-to-equity
ratio indicates that every 2 cents of liability are covered by one (1) peso of
total equity. Further, this indicates that the business is financed mainly
through equity. Moreover, this shows that the equity of the company is larger
and that the business does not rely on creditors to finance its operations.

Equity Ratio 2025 2026 2027 2028 2029

Total Equity 1,313,989.74 1,434,316.36 1,636,453.87 1,749,488.03 1,916,274.01
Divided by: Total Assets 1,336,236.21 1,462,409.11 1,672,061.26 1,794,884.45 1,967,944.71
Equity Ratio 0.98 0.98 0.98 0.97 0.97

The equity ratio is the solvency ratio that helps measure the value of
the assets financed using the owner’s equity. The equity ratios for the years
2025, 2026, 2027, 2028 and 2029 remained constant at 0.98. This means
that for every one peso of the asset owned by the Litangfan’s Boundless
Bakes, the partners contributed 98 centavos in the year 2025. This indicates
that most of the assets of the firm are provided by the investments of the
partners.

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Debt Ratio 2025 2026 2027 2028 2029
Total Liabilities 22,246.43 28,092.69 35,607.33 45,396.36 51,670.63
Divide by: Total Assets 1,336,236.21 1,462,409.11 1,672,061.26 1,794,884.45 1,967,944.71
Debt Ratio 0.02 0.02 0.02 0.03 0.03

The debt ratio refers to a financial ratio that measures the extent to
which businesses rely on debt to finance their assets or increase returns. The
computed debt ratio shows that for every one-peso asset owned by the
company, two centavos come from the creditors. Litangfan Boundless Bakes
has a low debt ratio, which indicates that only 2% of the total funds and
resources are funded by the business's creditors. Further, it shows that there
is a low possibility of obtaining debt to continue its operation.

C. Profitability and Return on Investors' Ratio

Gross Profit Margin 2025 2026 2027 2028 2029

Gross Profit 549,149.24 636,821.26 757,066.53 906,952.02 985,350.75
Divided by: Net Sales 1,359,357.00 1,628,465.36 1,968,571.24 2,375,731.00 2,794,296.70
Gross Profit Margin 0.40 0.39 0.38 0.38 0.35

Gross profit margin shows a business’s sales and production

performance, or how efficient a business’ processes are. This indicates that
the business’ sales can cover its costs. The gross profit margin shows that for
every one (1) peso sale, 40 centavos represent gross profit.

Operating Profit Margin 2025 2026 2027 2028 2029

Net Income/ (Loss) Before Income Tax 71,893.91 149,724.55 251,390.84 389,228.82 455,520.77
Divided by: Net Sales 1,359,357.00 1,628,465.36 1,968,571.24 2,375,731.00 2,794,296.70
Operating Profit Margin 0.05 0.09 0.13 0.16 0.16

This measures how much profit a business makes after paying for
variable costs of production, such as wages and raw materials, but before
paying tax. The operating profit margin of Litangfan Boundless Bakes
illustrates that it is efficient in its operation and can generate profit through
its core operations.

Net Profit Margin 2025 2026 2027 2028 2029

Net Income After Tax 57,807.74 120,326.61 202,137.51 313,034.16 366,785.99
Divided by: Net Sales 1,359,357.00 1,628,465.36 1,968,571.24 2,375,731.00 2,794,296.70
Net Profit Margin 0.04 0.07 0.10 0.13 0.13

Net profit margin measures how much net income is generated. This
helps investors assess if a company's management is generating enough

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profit from its sales and whether operating costs and overhead costs are
under control. The computed net profit margin indicates that the business is
generating profit from its sales.

Return on Investment on Asset 2025 2026 2027 2028 2029

Net Income After Tax 57,807.74 120,326.61 202,137.51 313,034.16 366,785.99
Divided by: Total Asset 1,336,236.21 1,462,409.11 1,672,061.26 1,794,884.45 1,967,944.71
Return on Investment on Asset 0.04 0.08 0.12 0.17 0.19

This ratio indicates how well a company is performing by comparing if

the net income is generating to the capital invested in assets. The proposed
business’ ROI on assets is positive and efficient in utilizing its economic
resources.

Number of
Years Net Investment Cash Inflow Years
2024 1,300,000.00 1,300,000.00 -
2025 1,300,000.00 213,613.34 1.00
2026 1,086,386.66 344,995.48 1.00
2027 741,391.18 653,041.55 1.14
Payback Period 3.14
3 years, 1 month and 8 days

This ratio indicates that Litangfan’s Boundless Bakes will recoup its
initial investments for 3 years, 1 month and 8 days which is in line with the
average payback period for the bakery shop industry of 2 to 5 years.

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ACCOUNTING ASPECT

Accounting plays a vital role in the smooth operation of a business

organization as it provides a clear picture of the financial health and
performance of the business which can serve as a catalyst for resource
management and strategic growth. It helps the business track income and
expenditures, ensure statutory compliance and provide management,
investors and government with quantitative financial information which can
be used in making business decisions.

Accounting aspect summarizes the essential accounting methods and

internal controls to be used in the business operation. This aspect includes
the accounting cycle, chart of accounts of the business and internal controls
to be applied by the business. It also includes the accounting method,
assumptions, and narratives of other basic accounting procedures.

A. ACCOUNTING CYCLE

Accounting cycle is a holistic process of identifying, analyzing, and

recording the accounting events of an entity. This cycle starts with recording
all financial transactions throughout the accounting period and ends with
posting closing entries to close the books and prepare for the next
accounting period.

STEPS IN THE ACCOUNTING CYCLE

The accounting cycle is a systematic process that begins with

the collection of source documents, such as bank statements and
purchase orders, elucidating the purpose of each financial transaction.
Following this, transactions are analyzed to identify their impact on
assets, liabilities, capital, revenues, and expenses, ensuring
recognition of reportable business events. Subsequently, the
journalizing of transactions takes place, recording them in a
chronological order in the daily accounting record known as the

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journal, capturing both debit and credit aspects along with brief
descriptions called narrations.

Further in the cycle, information from the journal is transferred

to the ledger, providing a comprehensive breakdown of all accounting
activities by account. This facilitates the accurate transfer of data to
each account affected by a transaction. The process continues with the
preparation of an unadjusted trial balance, serving as a starting point
for analyzing account balances and making adjusting entries. Adjusting
entries are made at the end of the period to correct errors and account
for the passage of time, leading to the preparation of an adjusted trial
balance reflecting compliance with accounting principles. The cycle
concludes with the preparation of financial statements, offering
insights into the business's financial performance, position, and cash
flow. Closing journal entries finalize temporary accounts, and a post-
closing trial balance ensures debit-credit equality after closing entries,
providing a foundation for the subsequent accounting period.

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 Figure 3.31 Flow Chart of Accounting Cycle
B. CHART OF ACCOUNTS
A chart of accounts is a listing of the names of the accounts that a
company has identified and made available for recording transactions in its
general ledger. A company has the flexibility to tailor its chart of accounts to
best suit its needs, including adding accounts as needed.

Table 3.42 Accounts Description

Account Account
Description
Code Title
ASSETS
Current Assets
Consists of coins and currencies on hand which
101 Cash on Hand is accessible to a business when it's needed for
an unexpected expense.
102 Cash in Bank The current balance in checking accounts,

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 savings accounts, or the like in the name of the
business and this do not include retirement
accounts or personal bank account balances.
Assets held for sale in the normal operation of
the business, goods in the process of
103 Inventories
production for sale, and raw materials to be
consumed in the production process.
Encompasses the essential ingredients and
components, such as flour, sugar, eggs, and
other primary baking supplies, procured by a
103.1 Raw Materials
bakery for use in the initial stage of production
process before being transformed into finished
goods.
The fully processed and ready-to-sell bread,
Finished
103.2 after completion of the production process,
Goods
awaiting purchase by customers.
Office and Consumables that are regularly used
104 Store in offices by the business such as pen, paper
supplies ink, record books and others
These are essential items used in the kitchen
Kitchen
105 such as dishwashing paste, trash bags, tissue
supplies
and pot holders.
Products and materials purchased by a
business that are not directly employed in its
manufacturing process but they contribute to
Maintenance
106 maintain adequate operational standards,
Supplies
guaranteeing that all the different areas of the
business have what they need to function
properly
Non-Current Assets
Kitchen tools are small hand-held tool used for
110 Kitchen Tools
food preparation.
110.5 Accumulated The total amount of depreciation expense that

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 Depreciation- has been allocated for the kitchen tools since
Kitchen Tools the assets were put into use.
Kitchen Kitchen equipment refers to tools or machines
111
Equipment that requires power to operate in the kitchen.
Accumulated
The total amount of depreciation expense that
Depreciation-
111.5 has been allocated for the kitchen equipment
Kitchen
since the assets were put into use.
Equipment
Office and These are the instruments, tools and machines
112 Store that are required to perform the various tasks
Equipment in an office.
Accumulated
Depreciation- The total amount of depreciation expense that
112.5 Office and has been allocated for the office equipment
Store since the assets were put into use.
Equipment
Movable furniture and fixtures that have no
Furniture and permanent connection to the structure of a
113
Fixtures building. These items include desks, chairs,
tables, shelves, display racks and cabinets.
Accumulated
The total amount of depreciation expense that
Depreciation-
113.5 has been allocated for the furniture and
Furniture and
fixtures since the assets were put into use.
Fixtures
Improvement made by the lessee to a rental
Leasehold
114 property to customize it for the particular need
Improvement
of the business before operations could start.
Accumulated The total amount of depreciation expense that
114.5 Depreciation- has been allocated for the leasehold
Leasehold improvement since the assets were put into
Improvement use.
115 Other Assets Includes all balance sheet asset accounts not
covered specifically in other areas of the

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 supervisory account.
Accumulated The total amount of that has been allocated for
116 Depreciation- the furniture and fixtures since the assets were
Other Assets put into use.
LIABILITIES
SSS, Represents the amount that the company is
PhilHealth, obliged to pay to the SSS, PhilHealth, and
201
and HMDF HMDF monthly for all their employees as
Payable mandated by law.
Represents the amounts owed to the utility
Accrued companies for electricity, gas and water as of
202 Utilities the date of the balance sheet date. This are
Payable expenses that have been incurred but haven’t
yet been paid.
A business tax for taxpayers whose annual
Percentage gross sales do not exceed three million pesos
203
Tax Payable (Php3,000,000.00) and are exempt from value-
added tax (VAT) under the tax laws.
Income Tax The tax liability that the business has not yet
204
Payable paid to the government.
The set amount of income tax that an employer
Withholding withholds from the employee’s paycheck which
205
Tax Payable will be directly remitted to the government on
the employee’s name.
EQUITY
Fagyan,
301
Capital
The total of the initial and additional
Kesaed,
302 investment made by the partners, which is
Capital
increased by profits and decreased by losses
Nalibsan,
303 and withdrawals.
Capital
Peters,
304
Capital

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 Fagyan,
305
Withrawal
Kesaed,
306 A temporary account that represents cash or
Withdrawal
other assets taken by the partner for personal
Nalibsan,
307 use.
Withdrawal
Peters,
308
Withdrawal
REVENUES
The volume of goods and services sold by the
401 Sales
business during a reporting period.
The amount of interest that has been earned
Interest during a specific period. It is earned from
402
Income investments that pay interest, such as in a
savings account or certificate of deposit.
EXPENSES
The direct costs of producing the goods sold by
Cost of Goods the business. This amount includes the cost of
501
Sold the materials and labor directly used to
produce finished good.
Advertising
502 Costs incurred in promoting the business.
expense
Office
The amount of administrative supplies charged
503 Supplies
to expense in a reporting period
Expense
Kitchen and These supplies include maintenance materials,
maintenance janitorial supplies, and items that are
504
supplies considered incidental to the production
expense process.
Salaries The salaries that employees have earned
505
expense during the period.
506 Rent expense Cost of using rental property.
507 Taxes and The taxes paid in connection with business in

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 production of income and fees that are paid to
licenses
keep the business license current.
Expenses for normal maintenance and upkeep
Repairs and of capital assets that are necessary to keep the
508 maintenance assets in their usual condition. These expenses
expense are recurring in nature and do not extend the
useful life of the asset.
Uniform Expenses that cover the cost of uniforms of the
509 allowance employees that they use during the ordinary
expense course of business.
Cost incurred by using utilities such as
Utilities
510 electricity, water, waste disposal, heating, and
expense
sewage
Costs in conducting a detailed analysis that
Feasibility considers all the critical aspects of a proposed
512
cost project to determine the likelihood of it
succeeding.
The amount of expense that a business
Income tax
513 recognizes in an accounting period for the
expense
government tax related to its taxable profit.
Depreciation The cost of the kitchen tools, equipment, office
514 Expense- tool and store equipment, furniture and
Kitchen Tools fixtures, other assets and leasehold
Depreciation improvement that has been depreciated for a
Expense- single period and shows how much of the
515
Kitchen asset's value has been used up in that year.
Equipment
Depreciation
Expense-
516 Office and
Store
Equipment
517 Depreciation

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 Expense-
Furniture and
Fixtures
Depreciation
518 Expense-
Other Assets
Depreciation
Expense-
519
Maintenance
Tools
SSS Premium
 All actual remuneration for employment,
including the mandated cost of living
allowance.
SSS,
PHIC (PhilHealth) Premium
PhilHealth,
 Basic Monthly Compensation regularly
520 and HDMF
paid for service rendered by the
Premiums
employee
Expense
HDMF (PAG-IBIG Fund) Premium
 Basic Monthly Salary plus mandated cost
of living allowance (maximum of
Php5,000).

C. BOOKS OF ACCOUNTS AND CONTROL RECORDS

1. General Journal
 The general journal is the book of original entries. It shows all the
effects of the business transaction in terms of debits and credits.
Thus, a typical general journal has at least five columns: one for
date, account titles, posting reference, debit and credit columns.
2. General Ledger
 A general ledger is a book or file that records all the entity’s assets,
liabilities, expenses, income and equities. Moreover, it is used as a

127
 tool to classify the recorded transaction in the general journal to get
the final balance of each account.
3. Special Journal
 The special journals are kept by the business which is to be
prepared to facilitate the efficient and practical recording of similar,
specific, and recurring transactions. These help the business to
keep organized records outside of the general journal through
categorizing the transactions into different types and groups. These
include Sales Journals, Cash Receipt Journals, Purchase Journals,
and Cash Disbursement Journals.
D. ACCOUNTING SYSTEMS AND PROCEDURES
1. Cash Receipt Procedure
 The managing partner shall be responsible for all daily collections of
sales from customer and the handling of cash on hand. All
collections will be placed in the vault for safety and will be
deposited every end of the week by the manager. In addition, a
CCTV camera will be installed in the office of the manager for daily
monitoring of the person opening the vault.
 The manager is also responsible for preparing the source
documents of the business to be submitted to the bookkeeper
every last working day of the month
 The manager will be responsible for the petty cash fund that will be
maintained at ₱5,000.00.
2. Cash Disbursement Procedure
 The manager shall be responsible for overseeing the need to
disburse cash. If disbursement is needed, the manager, then
disburses cash to appropriate personnel and documents the release
of cash. All disbursements made shall be supported by appropriate
source documents. No disbursement shall be made without the
manager’s approval.
3. Payroll Procedure
 At the end of the month, the bookkeeper summarizes the Daily
Time Record (DTR) of all employees, computes the salaries,
prepares payroll and submits it to the manager for approval. Upon

128
 approval of the manager, being the cashier, disburses the salaries
of each employee.
4. Accounting Procedure
 The bookkeeper should report every end of the week to consolidate
the official receipt, transactions and other documents. The
bookkeeper shall also prepare the financial statement of the
business annually or as requested by the manager. He shall prepare
the payroll at every end of the month. All necessary documents and
records shall be obtained from the manager/cashier.
5. Accounting Method
 Litangfan’s Boundless Bakes will use Asset method in recording its
transactions. All purchases are recorded as asset and recognize
expense when they are used. Revenue method is used in
recognizing income and all sales are in cash basis.
E. ACCOUNTING STANDARDS AND ACCOUNTING ESTIMATES
ASSUMPTIONS FOR COMPUTATIONS:

129
1. Sales
 Sales shall be done on cash basis only since the business will not be
allowing credits from customers. Therefore, no accounts receivable
account will be maintained.
2. Prices
 Prices of the products are assumed to be equivalent to the market
price for the first year of operation. Increases of prices and cost of
raw materials, supplies and certain expenses were inflated using
the projected inflation per year, which was computed based on the
inflation rates in the last five years using the moving average
method.
 The prices of products are set using competition-based pricing
strategy and are assumed to increase by the projected inflation rate
every year.
3. Purchases
 Purchase of raw materials and packaging supplies shall be done
before every production and is based on a cash basis.
 Purchase of other supplies such as office supplies and maintenance
supplies shall be done every end of the month and is also based on
cash basis.
 5% of the supplies available for use during the year is expected to
be unused at year-end.
4. Salaries
 The employees and workers will be compensated based on their
corresponding hourly rates.
5. Depreciation Expense
 Depreciation expenses are to be computed using the Straight-Line
Method with assigned salvage value of 10% of the Cost of
corresponding item. Useful life of Property Plant and Equipment is
based on the provision of New Government Accounting System
(NGAS).
 Once the value of the equipment reaches ₱10,000, it will undergo
reclassification and be considered as supplies.
6. Income Taxes

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  Income taxes will be computed based on the higher Minimum
Corporate Income Tax and Regular Corporate Income Tax.
REPORTORIAL REQUIREMENTS:
1. Internal Reporting
 The manager takes the responsibility of supervising the employees
and overseeing the collections and expenses of the business during
operations and the bookkeeper is responsible for the preparation of
the Financial Statement of the Business.
2. External
 The financial Statement prepared by the Bookkeeper shall be
audited by external auditors. The audited Financial Statement will
then be made available to any end users aside from the partners.
This agency includes but not limited to Bureau of Internal Revenue
(BIR) and Securities and Exchange Commission (SEC).
F. INTERNAL CONTROL
Internal control refers to the set of procedures that are created,
implemented, and maintained by individuals responsible for management
and governance to assure that the entity’s objective regarding the accuracy
and efficiency of financial reporting, the efficacy and efficiency of operations,
and adherence to legal and regulatory requirements will be achieved.
Managers utilize internal control as a tool to assist an entity in
achieving its objectives. Additionally, it encompasses all the rules and
practices that an organization's management has put in place to help them
achieve their goal of guaranteeing, to the extent that it is possible, the
efficient and orderly conduct of their business. These include following good
management practices, protecting assets, preventing and identifying fraud
and error, maintaining accurate and complete accounting records, and
promptly preparing trustworthy financial information.
1. Physical Control
The physical security of all the business’ assets and facility shall
be the responsibility of the employees on duty. Security locks and
CCTV are installed to monitor the activities within the perimeter of the
business and its surroundings and access control is observed in the

131
 office where all the documents are kept to ensure that only authorized
personnel can enter. Also, an emergency exit is clearly labelled, a fire
extinguisher is mounted, and a solar panel will be installed in case of
brownout.
2. Source Document Control
All source documents issued by the business such as sales
invoices, purchase orders and copies of official receipt should be pre-
numbered.
3. Other Control Procedures
a. Cash in Bank
 Collections should be deposited at Treasure Link Cooperative.
 All withdrawals below the amount of Five hundred thousand
pesos (₱500,000.00) must be signed first by the persons with
authority which is the manager, who is also acting as the
cashier, however if the amount to be withdrawn exceeds the
amount of Five hundred thousand pesos (₱500,000.00), it must
be signed by the manager, manager and the partners.
b. Inventories
 Inventory should be measured using the First In First Out basis
of inventory valuation.
 Physical counts of inventories will be conducted every end of the
week and must be recorded in the log book of inventories.
c. Packaging/ Kitchen Supplies
 Packaging supplies and Kitchen supplies should be monitored
by the manager every end of production to determine if there
is a need for purchase to avoid supplies’ stock out.
d. Tools and Equipment/ Furniture and Fixtures
 All tools, equipment, furniture and fixtures belong to the
business alone; thus, no partner is allowed to use it for their
personal use
 All equipment should be monitored and every after
production to ensure that it is safety for future use, maintain
its high performance and to maximize its useful life.
e. Conducting Audit

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  Internal and External audit shall be done within the premises
of the business only and all documents are not allowed to be
brought outside the premises of the business unless
permitted or authorized by the manager.
f. Safe Keeping of Financial Records
 Books of original entry and all financial supporting
documents should be kept in a vault by the manager inside
the office. All financial supporting documents should be
properly filed and separated with the non-financial
supporting documents.

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