MAPLE HILL DAIRY FARM
HURUF COST UNIT ANALYSIS
Oct 5, 2010
The demand intended for organic products in the US has been growing tremendously in the past decade. Numerous warnings about what we all consume are incredibly common; the harmful chemicals, preservatives and other additives are creating medical problems worldwide. Therefore, a growing specific niche market for 100% natural processing is definitely booming.
Maple Hill Dairy Farm can be described as small family-owned business. They take pride within their high quality milk products they create. They sell their particular dairy products in a small store next to the farming operation along with several location markets. Component to their appeal is due to the truth that their products are still bottled in glass bottles. However , this is also element of their problem.
Maple Slope Dairy is a DIFFERENTIATOR. They make and sell good quality products and receive between a 25% to 40% superior over normal market prices. Their net profit of $17, 759. 00 for annual operations appears to be low for a dairy operation this kind of size.
Laura Ashley, the manager for Maple Hill, requested an evaluation to help her determine a couple of specific concepts.
1 ) The possibility of changing the box and product packaging system. At the moment, the bottle of wine that they bundle each of their dairy products in is. 75 cents every. By changing from a glass box to a plastic-type material or daily news container, they are going to save. 60 cents every single on direct material costs. There is a likelihood of losing their " charmвЂќ as they look for the possibility of clients. Also, the bottling procedure overhead costs, they will estimate, will be half of the cost of that with this analysis.
2 . The possibility of expansion. Currently, they are operating in capacity.
A great ABC price analysis shows that even though are placing an annual profit, two of their products are costing more to produce per unit than they are receiving revenue pertaining to. Each bottle of wine of candy milk that they produce costs an average of $2. 68. They may be selling that for $1. 90 вЂ“ nearly...
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