This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Here are the calculations for the gross margin of each crop and the discussion of factors for farm planning. i) Calculate the gross margin for each crop The gross margin is calculated as: Gross Margin = Total Revenue - Total Variable Costs All calculations are per hectare. For Maize: Step 1: Calculate Total Revenue for Maize. Total Revenue = Yield per hectare × Price per kg Total Revenue = 5500 kg × 15 Kshs/kg = 82500 Kshs Step 2: Calculate Total Variable Costs for Maize. Cost of cultivation/ha: 3000 Kshs DAP fertilizer cost: 3 bags × 1500 Kshs/bag = 4500 Kshs Labour cost: 50 man days × 150 Kshs/man day = 7500 Kshs CAN fertilizer cost: 3 bags × 1000 Kshs/bag = 3000 Kshs Total Variable Costs (Maize) = 3000 + 4500 + 7500 + 3000 = 18000 Kshs Step 3: Calculate Gross Margin for Maize. Gross Margin (Maize) = 82500 Kshs - 18000 Kshs = 64500 Kshs For Beans: Assumption: For Beans, "Yield per hectare Kshs.5000" is interpreted as 5000 kg, consistent with the maize data format. Step 1: Calculate Total Revenue for Beans. Total Revenue = Yield per hectare × Price per kg Total Revenue = 5000 kg × 50 Kshs/kg = 250000 Kshs Step 2: Calculate Total Variable Costs for Beans. Cost of cultivation/ha: 3600 Kshs Labour cost: 75 man-days × 200 Kshs/man day = 15000 Kshs DAP fertilizer cost: 2 bags × 1500 Kshs/bag = 3000 Kshs Seed cost: 20 kg × 80 Kshs/kg = 1600 Kshs CAN fertilizer cost: 1 bag × 1000 Kshs/bag = 1000 Kshs Cost of sprays: 3000 Kshs Total Variable Costs (Beans) = 3600 + 15000 + 3000 + 1600 + 1000 + 3000 = 27200 Kshs Step 3: Calculate Gross Margin for Beans. Gross Margin (Beans) = 250000 Kshs - 27200 Kshs = 222800 Kshs ** ✂️ _That answer was long and got cut off. Reply continue and I'll finish it._