Taking into account the data in Exhibit 1, prepare a table that calculates when a hen is
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Question:
- Taking into account the data in Exhibit 1, prepare a table that calculates when a hen is “spent” under normal conditions such as the CCF Brands contract, or that could be used to decide when it is no longer profitable to continue egg production. That is, create a model with formulas for which you can easily vary inputs, such as price, profit, or variable costs (such as in question 2 below). Use the output template provided below. (Hint: Distinguish between relevant and non-relevant costs. Determine the estimated revenue per dozen and weekly production costs first.)
Week(s) | # Eggs per Hen/Week | # Weeks | Dozen Eggs Laid | Marginal Costs | Marginal Revenue | Contribution to Profit |
1-23 | n/a | 23 | 0 | $(10.64) | $0 | $(10.64) |
24 | 3 | 1 | 0.25 | |||
25 | 4 | 1 | 0.33 | |||
26 | 5 | 1 | 0.42 | |||
27-28 | 6 | 2 | 1.00 | |||
29-39 | 7 | 11 | 6.42 | |||
40-64 | 6 | 25 | 12.50 | |||
65-76 | 5 | 12 | 5.00 | |||
77 | 4 | 1 | 0.33 | |||
78 | 3 | 1 | 0.25 |
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