Comprehensive Resources for Agriculture: Topical Questions, Past Papers, and Answers
Atika School
Baraka farm manager plans to grow Irish potatoes or maize for grains. Study the information below and answer the questions that follow:Irish potatoes Cost of fertilizers/ha__________________________ Kshs 10,000. Labour requirements/ha ______________________ Kshs 50 man - days Yield /ha ___________________________________ 10,000kg Seed potato/ha ______________________________Kshs20, 000 Cost of labour _______________________________ Kshs 200 per man day Cost of fungicides_____________________________ Kshs 5000 Cost of ploughing_____________________________ Kshs 4000 Selling price of potatoes per kg __________________ Kshs 30. Maize Yield per hectare ______________________________Kshs.7, 500kg Selling price of maize per kg _____________________Kshs 20. Cost of ploughing /ha ___________________________Kshs.4000 Seed maize/ha _________________________________Kshs.3000 Labour requirement /ha _________________________ 200 man days. Cost of fertilizers /ha ____________________________Kshs 10,000 Cost of top dressing fertilizers ______________________Kshs 4,800 Cost of labour ___¬¬¬¬¬¬¬¬¬¬¬_______________________Kshs 150 per man - day (i) What is gross margin?
(ii) Calculate the gross margin of each of the crops Gross margin of Irish potatoes Cost of fertilizer =Kshs 10000 x 5 = 50000 Cost labour requirement = 50 x 200 x 5 = 50,000 Cost of seed potatoes 20,000 x 5 = 100000 Cost of fungicides 5000 x 5 = 25000 Cost of ploughing 400 x 5 = 50,000 Total variable cost shs.145, 000 Total revenue = shs.50, 000 x 50 = shs.1, 500, 000 Gross margin =Kshs. 1,500,000 – shs.145, 000 =shs.1, 255,100 Gross margin of Maize Cost of fertilizer. Kshs 10000 x 5 = shs.50000 Cost of fertilizer. Kshs. 4800 x 5 = shs.24000 Cost of maize seed shs.3000 x 5 = shs.15000 Cost f labour shs.200 x 150x 5 = shs.150000 Cost of ploughing shs.4000 x 5 = shs.20000 Total cost = shs.259000 Revenue 750000 X 5 X 20= Shs.750000 Gross margin = 750000 - 259000 = Shs.481000 (iii) From the calculation above which crop should the farm grow?
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