Comparison Between Sterling Farm And Bogside Farm

farms to keep their prices low, can eventually cause the market to fail. (58) The article The

Contribution Margin = (Unit selling price – unit variable cost) / unit selling price = ($9.00 – $2.60) / $9.00 = 0.7111 = 71.111%

Alongside the growth of large farms, crops are being subsidized which leads to the prices of the goods being kept at a low price (Toews). For a family farm, this means producing a crop that is not cost effective which eventually drives the family farms out of business. Once these large corporations produce the crop, it is then shipped to the manufacturers

The change in the contribution margin for all the products is responsible for the change in profitability.

The Gross Margin ratio represents the percent of total sales revenue that TCI retains after incurring the direct costs associated with producing the goods and services sold by them. It helps us distinguish, as much as possible, between fixed and variable costs. With a 20%, 15%, or 10% projected increase in sales, for 1996, we calculated TCI’s GM ratio to be 41.85% , and in 1997 to be 41.84%. This means that around 42% of TCI’s sales dollar is available to pay for fixed costs, like its potential long-term debt to MidBank, and to add to profits.

Middlemen- Middlemen set the price of the produce low when they sold because the market price was unpredictable.

There is a market trend of supply and demand in an economy and this is measured through the equilibrium process and the actors that affect supply and demand. The farmers are the market suppliers and hence they determine their produce by measuring the equilibrium market prices and quantities. The suppliers are aware that when the prices of commodity increases the demand of the same commodity decrease and when demand increases supply decreases until the market reaches an equilibrium point. There are various factors that affect

Since our company’s main focus is premium products we will aim for high contribution margins, around 50%, on average, over all five products. After establishing our company brand and products within the market we will look to increase contribution margin to be between 55%-60% over all five products.

Considering the marketing segment, we choose the target market from small, medium and large farms. If products are sold to small farms, the sales revenues even can’t cover the cost,

Break Even Point in Sales = (Total Fixed Costs + Target Profit) ÷ Contribution Margin Ratio

8.20 equals $ 86,700. The contribution margin per unit at a retail price of Cr. 6.85 equal 1.95. The required volume will be the result of dividing the profit impact on the contribution margin per unit.

According to, Skills for Business Decisions, “Cost-volume-profit (CVP) analysis examines changes in profits in response to changes in sales volumes, costs, and prices.” (Kimmel P.D. 2009) A company’s profit is the CVP profit equation of Profit = Revenue – Expenses. A Cost-volume-profit (CVP) analysis consists of five basic components that include:

Moreover the university known as fraser valley had the highest prices so far in any of the market by any other country. And the next and the most expensive farmland was recorded by the Bradford which is locate in Ontario and where the value of land was increased by 25 percent. This also stated that the demand is affected by the operations of farmland which also further expanded. Now a days, increase in the demand of the farmland led to increase in the number of buyers for various lands which also affected the price in the economy. As after increase in prices of farmland there was a huge increase in rate of the agricultural commodities. Thus sometimes demand exceeds supply and sometimes supply exceeds demand. When demand exceeds is known as quantity demanded and when supply increased is knows and quantity supplied. Both demand and supply are effected on basic reasons as each and every other country’s economic transactions and various type of goods and services are affected by the forces of demand and supply. Sometimes the economy lowers or equals the demand and supply and this will lead to equilibrium in the economy where the demand is equal to supply so the price of farmland will be in control in form of every other country. Mostly demand in the economy is increased by both demand of the products and related to all

The ratio expresses the relationship of gross profit on sales to net sales in terms of percentage (Van Horne, Wachowicz & Bhaduri, 2005). Goss profit is the result of the relationship between prices, sales volume and costs. Gross profit margin of Starbucks Corporation is 23% whereas the ratio for McDonald’s is 35%. McDonald’s ratio is high as compared to Starbucks which is a sign of good management. It implies that the cost of production of the firm is relatively low. The McDonald’s has reasonable gross margin which ensures adequate coverage for operating expenses of the firm and sufficient return to the owners of the business, which is reflected in the net profit margin.

As, in this case study as the total revenue is $22,500,000 and the total events is 5000 events therefore revenue per event is $4,500 ($22,500,000/5000), therefore, the contribution margin per event is $1,900 ($4,500 - $2,600) and as the contribution margin ratio is contribution margin/revenue; therefore the contribution margin in this case is 42% ($1,900/$4,500).