Instructions: You have been hired as an external consultant by Extra Virgin Olive Oil Incorporated (EVOOI)...

    

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Instructions: You have been hired as an external consultant by Extra Virgin Olive Oil Incorporated (EVOOI) to advise them on their cost of setting up an olive oil producing facility in southern Victoria. Please provide advice to the questions provided by the CEO (Dr Pit) below. Please present your responses to the questions in a slide PowerPoint style (save as PDF and upload). Provide your name and Student ID on the title page of the PDF upload. Also please upload the excel file used to create your graphs. Victorian Olive Oil Project A foreign investor, Extra Virgin Olive Oil Incorporated (EVOOI) is considering establishing an irrigated olive-growing and oil-processing project in Southern Victoria. Extra virgin olive oil production is represented by a competitive industry and a market determined wholesale price of $3.55 per litre. It is estimated that each hectare (Ha) of land used for the production of olive oil will produce 200 trees. Fruit yield per tree is 25kg. Oil yield is expected to be 0.30 litres per kg of fruit with a 30%/70% split of olive oil/extra virgin olive oil. Ha The following total fixed operating cost schedule is provided with fixed costs spilt between olive oil and extra virgin olive oil based on percentage of oil yields from fruit: Cost Category Administration and management Accounting support Marketing IT support Office equipment Depreciation on equipment Interest on loans The following schedule applies to all variable costs which are spilt between olive oil and extra virgin olive oil based on percentage of oil yields from fruit: 100 200 300 400 500 600 700 800 900 1000 Harvesting labour cost $/litre 0.040 0.032 0.024 0.024 0.025 0.027 0.032 0.041 0.062 0.124 $ amount 600,000 40,000 60,000 75,000 130,000 20,000 35,000 Harvesting fuel cost $/litre Factory Labour cost $/litre 0.020 0.040 0.016 0.032 0.012 0.024 0.012 0.024 0.013 0.025 0.014 0.027 0.016 0.032 0.021 0.041 0.031 0.062 0.062 0.124 Electrical Power cost $/litre Repairs & Bottling Freight cost Mainte- cost nance $/litre $/litre $/Litre 0.500 0.140 1.000 0.400 0.112 0.800 0.084 0.600 0.086 0.612 0.089 0.636 0.341 0.095 0.681 0.398 0.112 0.797 0.518 0.145 1.036 0.777 0.218 1.554 0.404 1.554 0.435 3.108 0.130 0.104 0.078 0.300 0.080 0.306 0.083 0.318 0.089 0.104 0.135 0.202 Questions: 1a. Calculate total trees, fruit yield (in kg) and output of extra virgin olive oil (in litres) for 100, 200, 300, 400, 500, 600, 700, 800, 900 and 1,000 Ha of total land use and present your answers in a table format 1b. For each of the extra virgin olive oil yield output levels, calculate the total fixed cost, total variable cost, total cost, average fixed cost, average variable cost, average total cost and marginal cost and present your answers in a table format 2a. Using a chart created in Excel, provide an illustration of the total cost, total variable cost and total fixed cost of extra virgin olive oil 2b. Using a chart created in Excel, provide an illustration of average total cost, average variable cost and average fixed cost and marginal cost of extra virgin olive oil 3a. Why do the average costs curves and marginal cost curve demonstrate a U- shape as shown in 2b? (in your answer refer to the respective quantity of litres) 3b. How many litres of extra virgin olive oil should the business produce? Explain your answer by referring to the profit maximising condition Instructions: You have been hired as an external consultant by Extra Virgin Olive Oil Incorporated (EVOOI) to advise them on their cost of setting up an olive oil producing facility in southern Victoria. Please provide advice to the questions provided by the CEO (Dr Pit) below. Please present your responses to the questions in a slide PowerPoint style (save as PDF and upload). Provide your name and Student ID on the title page of the PDF upload. Also please upload the excel file used to create your graphs. Victorian Olive Oil Project A foreign investor, Extra Virgin Olive Oil Incorporated (EVOOI) is considering establishing an irrigated olive-growing and oil-processing project in Southern Victoria. Extra virgin olive oil production is represented by a competitive industry and a market determined wholesale price of $3.55 per litre. It is estimated that each hectare (Ha) of land used for the production of olive oil will produce 200 trees. Fruit yield per tree is 25kg. Oil yield is expected to be 0.30 litres per kg of fruit with a 30%/70% split of olive oil/extra virgin olive oil. Ha The following total fixed operating cost schedule is provided with fixed costs spilt between olive oil and extra virgin olive oil based on percentage of oil yields from fruit: Cost Category Administration and management Accounting support Marketing IT support Office equipment Depreciation on equipment Interest on loans The following schedule applies to all variable costs which are spilt between olive oil and extra virgin olive oil based on percentage of oil yields from fruit: 100 200 300 400 500 600 700 800 900 1000 Harvesting labour cost $/litre 0.040 0.032 0.024 0.024 0.025 0.027 0.032 0.041 0.062 0.124 $ amount 600,000 40,000 60,000 75,000 130,000 20,000 35,000 Harvesting fuel cost $/litre Factory Labour cost $/litre 0.020 0.040 0.016 0.032 0.012 0.024 0.012 0.024 0.013 0.025 0.014 0.027 0.016 0.032 0.021 0.041 0.031 0.062 0.062 0.124 Electrical Power cost $/litre Repairs & Bottling Freight cost Mainte- cost nance $/litre $/litre $/Litre 0.500 0.140 1.000 0.400 0.112 0.800 0.084 0.600 0.086 0.612 0.089 0.636 0.341 0.095 0.681 0.398 0.112 0.797 0.518 0.145 1.036 0.777 0.218 1.554 0.404 1.554 0.435 3.108 0.130 0.104 0.078 0.300 0.080 0.306 0.083 0.318 0.089 0.104 0.135 0.202 Questions: 1a. Calculate total trees, fruit yield (in kg) and output of extra virgin olive oil (in litres) for 100, 200, 300, 400, 500, 600, 700, 800, 900 and 1,000 Ha of total land use and present your answers in a table format 1b. For each of the extra virgin olive oil yield output levels, calculate the total fixed cost, total variable cost, total cost, average fixed cost, average variable cost, average total cost and marginal cost and present your answers in a table format 2a. Using a chart created in Excel, provide an illustration of the total cost, total variable cost and total fixed cost of extra virgin olive oil 2b. Using a chart created in Excel, provide an illustration of average total cost, average variable cost and average fixed cost and marginal cost of extra virgin olive oil 3a. Why do the average costs curves and marginal cost curve demonstrate a U- shape as shown in 2b? (in your answer refer to the respective quantity of litres) 3b. How many litres of extra virgin olive oil should the business produce? Explain your answer by referring to the profit maximising condition

Answer rating: 100% (QA)

Ill guide you through the calculations for the first part of the question 1a which asks us to calcul... View the full answer