Statement Showing Contributions Per Acre

Apples Apricots Cherries Plums

Output per Season (boxes) 500 150 100 200
Rs. Rs. Rs. Rs.
Sales Revenue (i) 5,000 1,500 2,000 6,000
Variable Cost: Materials 180 70 60 100
Labor 200 150 100 130
Harvesting and Packing 500 150 200 600
Transport 1000 300 100 600
Total Variable Cost (ii) 1,880 670 460 1,430
Contribution per acre [(i)-(ii)] 3,120 830 1,540 4,570

Ranking: (on the basis of contribution per acre)

First Plums
Second Apples
Third Cherries
Fourth Apricots
Minimum area to be allotted to produce 6,000 boxes

Plums 6,000/200 30 acres

Apples 6,000/500 12 acres

Cherries 6,000/100 60 acres
Apricots 6,000/150 40 acres

Since 200 acres are suitable only for cherries and apricots, the allotment should be as follows:

Cherries, Minimum 60 plus 100 surplus 160 acres

out of 200 Acres
Apricots(Minimum required) 40 acres
Apples(Minimum required) 12 acres
Plums (Balance) 88 acres
Total 300 acres
Estimated profit:

Contribution from: Rs.

Cherries: 160 acres @Rs.1,540 per acre 2,46,400
Apricots: 40 acres @ Rs. 830 per acre 33,200
Apples: 12 acres @ Rs. 3,120 per acre 37,440
Plums 88 acres @ Rs. 4,570 per acre 402,160
Total contribution 7,19,200
Less: Fixed costs Rs.
Cultivation and tending tress 1,28,000
Harvesting 21,000
Transport 5,000
Administration 42,000
Land revenue 9,000 2,05,000
Net profit 5,14,200