A market gardener is planning his production for next season, and he has asked you as a cost accountant, to recommend the optimal mix of vegetable production for the coming year. He has given .yeu the following data relating to the current year.
|
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calculate the profit if he were to do so 610114
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|
Turnips |
Parsnips |
Carrots |
|
|
Area occupied (acres) |
25 |
20 |
30 |
25 |
|
Yield per acre (tonnes) |
10 |
8 |
9 |
12 |
|
Selling price per tonne (£) |
100 |
125 |
150 |
135 |
|
Variable cost per acre (£): |
||||
|
Fertilizers |
30 |
25 |
45 |
40 |
|
Seeds |
15 |
20 |
30 |
25 |
|
Pesticides |
25 |
15 |
20 |
25 |
|
Direct wages |
400 |
450 |
500 |
570 |
|
Fixed overhead per annum £54 000 |
The land that is being used for the production of carrots and parsnips can be used for either crop, but not for potatoes or turnips. The land being used for potatoes and turnips can be used for either crop, but not for carrots or parsnips. In order to provide an adequate market service, the gardener must produce each year at least 40 tonnes each of potatoes and turnips and 36 tonnes each of parsnips and carrots.
(a) You are required to present a statement to show:
(i) the profit for the current year;
(ii) the profit for the production mix that you would recommend.
(b) Assuming that the land could be cultivated in such a way that any of the above crops could be produced and there was no market commitment, you are required to:
(i) advise the market gardener on which crop he should concentrate his production;
(ii) calculate the profit if he were to do so;
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