Front cover
CASE STUDY
Using Cost of Production for Decision Making
"The Vegetable Industry Development Program is funded by HAL using the vegetable levy and matched funds from the Australian Government".
InnoVeg Horticulture Australia Limited
Content
Introduction 02
What is included in cost of production? 03
Calculating cost of production 04
Changing yield and costs 05
Using cost of production to make decisions 05
Should I harvest or cut my losses? 06
Should I grow a new crop? 08
Conclusion 08
2
Case Study
USING COST OF PRODUCTION FOR DECISION MAKING
Introduction
This case study shows how calculating cost of production can be used to help vegetable growers make decisions.
Knowing your cost of production can help when making
business decisions as it provides a quick way of relating
your cost of producing a product with the price you are
going to accept for the product. The cost of production
can be calculated for any unit of production - tonnes,
cases, bunches or the whole paddock. For some crops
you might calculate cost of production for more than one
unit. For example, it may be useful to know the cost of
production of capsicums per tonne and per case as you
may be selling different units of production.
The case study describes:
⢠What is included in cost of production
⢠How to calculate cost of production
⢠When cost of production can be useful and why you need to be careful using cost of production
⢠How a grower can use cost of production to make business decisions
3 Case Study Using Cost of Production for Decision Making
USING COST OF PRODUCTION FOR DECISION MAKING
What is included in cost of production?
It is very important to firstly think about what all of your costs are to grow a...