Greenhouse Cost of Production SpreadsheetDOWNLOAD FILE
January 5, 2012 - Author: Betz, Fernandez, Runkle, Behe, Dudek and Himmelein
This work sheet is designed to assist the manager/owner in developing estimated cost for their greenhouse business.
Enterprise Cost are determined for:
1. Economic Cost of Production
2. Breakeven Net Worth Change
3. Breakeven Cash Flow
The output includes various sale prices needed to meet management and profitability objectives.
Up to 100 different enterprises can be simultaneously analyzed.
Strategies involve using financial information from past records and developing current projected cost.
Cost are separated into variable or "direct cost" and overhead or "in-direct" cost.
"Direct cost" are those cost that change proportionally as the units of production change.
"In-Direct" are cost that tend not to change as units of production change.
"Direct cost" per unit of production are entered directly into the enterprise budgets.
Five worksheets help calculate some of these estimated "direct cost".
Worksheets available are for fertilizer, pesticides, substrate, over wintering materials, and various direct labor cost.
"In-Direct cost " or overhead cost are allocated to the unit of production using the concept of "square foot weeks" (SFW).
"Square Foot Weeks" is determined by multiplying the average area (in ft) by time (in weeks) that it takes to produce the crop.
In addition a producer derived "weighting factor" can be assigned that gives greater flexibility in the final allocation percentages.
The allocation of overhead is then determined by calculating the percentage of the total SFW that each enterprise
uses (with the weighting factor) by the total "In-Direct" cost or overhead for the farm business as a whole.
Total overhead cost are captured from the income statement of the most current completed fiscal year.
Of course, major assumptions are made that the business overhead is relatively the same as that competed business year.
If not, assumptions and adjustments (matching to the future enterprises) should be made to correct to the annualized cost.
If you need additional help, please review the instructional video.