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Introduction - Cost Analysis for an Orange Juice Production Firm
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Question-1(a)
|
Harvesting labour cost |
Harvesting fuel cost |
FactoíyLabouí cost |
ElectíicalPoweí cost |
Repaiís& Maintenance |
Bottling cost |
Fíeight cost |
|||||||
|
Ha |
$/lite |
$/litíe |
$/litíe |
$/litíe |
$/litíe |
$/litíe |
$/litíe |
||||||
|
100 |
0.04 |
0.02 |
0.04 |
0.13 |
0.5 |
0.14 |
1 |
||||||
|
150 |
0.031 |
0.016 |
0.031 |
0.101 |
0.39 |
0.109 |
0.78 |
||||||
|
200 |
0.023 |
0.012 |
0.023 |
0.076 |
0.293 |
0.082 |
0.585 |
||||||
|
250 |
0.025 |
0.013 |
0.025 |
0.081 |
0.313 |
0.088 |
0.626 |
||||||
|
300 |
0.028 |
0.014 |
0.028 |
0.09 |
0.344 |
0.096 |
0.689 |
||||||
|
350 |
0.029 |
0.015 |
0.029 |
0.096 |
0.368 |
0.103 |
0.737 |
||||||
|
400 |
0.04 |
0.02 |
0.04 |
0.125 |
0.475 |
0.133 |
0.95 |
||||||
|
450 |
0.05 |
0.025 |
0.05 |
0.163 |
0.629 |
0.176 |
1.258 |
||||||
|
500 |
0.075 |
0.038 |
0.075 |
0.245 |
0.943 |
0.264 |
1.886 |
||||||
|
550 |
0.151 |
0.075 |
0.151 |
0.49 |
1.886 |
0.528 |
3.773 |
||||||
|
270.8333333 |
|||||||||||||
Analysis
The total cost calculated where total trees are 271 where the harvesting labour cost was 0.04 for 100, 0.031 for 150 and also 0.023 for 250 (Geromel et al, 2021). This is the actual cost that is calculated for harvesting labour cost and harvesting the fuel cost. The electrical power and the maintained power are also provided. The fruit yield is 0.151 with a total output of 0.49 in a large basis.
Question-1(b)
|
Total fixed cost |
|
|
Ha |
270 |
|
unit |
27 |
|
Total unit cost |
10 |
Table 2: Fixed cost
(Source: self-created)
|
Total variable cost |
|
|
Quantity of output |
10 |
|
variable cost per unit |
270 |
|
total |
2700 |
Table 3: Variable cost
Analysis
The total fixed cost is determined to be
|
total cost |
|
|
total cost of production |
480000 |
|
quantity of units |
48 |
|
total |
10000 |
Table 4: Total cost
|
Average fixed cost |
|
|
Ha |
270 |
|
unit |
27 |
|
total fixed cost |
10 |
|
Average |
0.37037 |
Table 5: Average fixed cost
|
Average variable cost |
|
|
quantity of output |
10 |
|
variable cost per unit |
270 |
|
total variable cost |
2700 |
|
Average |
10 |
Table 6: Average variable cost
|
total cost |
|
|
total cost of production |
480000 |
|
quantity of units |
48 |
|
total |
10000 |
|
Average |
208.3333 |
Table 7: Average total cost
|
Average marginal cost |
|
|
total cost of production |
20000 |
|
quantity of units |
45 |
|
total |
444.4444 |
|
Average |
9.876543 |
Table 8: Average marginal cost
Question-2(a)
The fixed cost is determined to be 270 for Ha and the unit produced is 27. Total unit produced for the company was 10. The variable cost generated for the company where the quantity produced is 10 and variable cost per unit is 270.
The total variable cot produced is 2700 (Vanderpoelet al, 2021). On the other hand, the total cost of production is analyzed as 4800000 were the total quantity produced was 48. The total cost derived from there is 10000.
Question-2(b)
On the above table it has been noticed that the total fixed is 10. Therefore, the then average of the fixed cost is 0.370. On the above table it has been noticed that the total marginal cost is 444. Therefore, the then average of the fixed cost is 9.87.
On the above table it has been noticed that the total variable cost is 10. Therefore, the then average of the fixed cost is contained with the amount of 10
Question-3 (a)
The curve of the marginal cost is in a U shape because the firm initially increases the total output of the business. Therefore, the firm will increase the total amount of cost and the variable cost (COSTet al, 2021). Therefore, this rate starts as a diminishing method. Therefore, the firm's output is rising in future and the total rate of marginal cost is increasing. Therefore, in the U shape, it has been noticed that the fixed cost and the marginal cost are rising. Therefore, the output has been increasing the fixed cost and it will thoroughly spread over the larger no of production units. Although, the average cost is falling accordingly downwards. Therefore, the total quantity of the fixed cost of the oranges just is about 1 liter and the marginal cost is around 10 liters.
Question-3 (b)
The business will produce around 10000 liters of orange juice in the firm. Therefore, the firm on average produces around 208 liters of orange during the whole year. Because the marginal cost aerate of the firm is high during the sale of the orange juice. The profit-maximizing will create maximum gap between the the total amount of cash and total revenue. Therefore, the output has been increasing the fixed cost and it will thoroughly spread over the larger no of production units. Therefore, this will happen when the marginal revenue is equal to the marginal cost MR=MC
Reference
- COST, N.D.C.I.T., TEST RYDE NUMBER DIRECT COST INDIRECT TOTAL COST DIRECT COST PER TEST COST PER PER TEST PER TEST TEST. An analysis of costs in the pathology laboratories of two Sydney hospitals, p.108.
- Vanderpoel, J., Stevens, A.L., Emond, B., Lafeuille, M.H., Hilts, A., Lefebvre, P. and Morrison, L., 2022. Total cost of testing for genomic alterations associated with next-generation sequencing versus polymerase chain reaction testing strategies among patients with metastatic non-small cell lung cancer. Journal of medical economics, 25(1), pp.457-468.
- GeromelDotto, H. and Thor Magnusson, K., 2022. Total cost of ownership optimization model for battery-electric trucks.
