Given the situation that Cox faces, build in your contribution margin analysis to compare two options: a.) keeping the hens through week 78, or b.) euthanizing early. For each calculation, use the average age of hens at the two different farms.

Note that the dozen eggs laid maybe incorrect, and please show how to solve this problem with formulas and explanations.

Summers with 60,000 hens and revenue of $0.30 per dozen #Eggs per Dozen Marginal Marginal Contribution Total Week(s) Hen Week Eggs Costs Revenue Margin Doz Contribution Weeks Laid Margin 44-64 6 21 10.50 65-76 5 12 5.00 77 4 1 0.33 3 0.25 78 Thomas with 70,000 hens and revenue of $0.30 per dozen #Eggs per Dozen Marginal Marginal Contribution Total Week(s) Hen/Week Eggs Costs Revenue Margin Doz Contribution Weeks Laid Margin 49-64 6 16 8.00 65-76 5 5.00 77 4 1 0.33 78 3 0.25 Exhibit 1. Arkansas Egg Company Cost and Production Information Arkansas Egg aimed to collect 26.6 dozen eggs from each hen over its productive laying cycle of 55 weeks. If that happened, based on the contract price, then AEC recovered the costs of bringing the bird to its productive cycle (about 40 cents/dozen) as well as fixed overhead (about 16 cents/dozen). The approximate contribution margin during this time was 7%. After the breakeven point, the only costs incurred were the variable production costs. Information on hen life cycle Approximate life of hen 78 weeks Pre-productive period of hen life cycle First 23 weeks of life Productive period or laying cycle Last 55 weeks of life Average age of laying hens at Summers' barns 43 weeks Average age of laying hens at Thomas' barns 48 weeks Minimum production target (PT) over which to allocate costs 26.6 dozen Approximate costs based on 26.6 dozen production target Total pre-production cost through week 23 Fixed overhead cost (facilities, debt service, depopulation, etc.) Variable production costs (feed, transportation, labor, etc.) Total cost for producing organic cage-free eggs Expected profit at 26.6 dozen (7%) $0.40 per dozen or $10.64 per bird $0.16 per dozen or $4.26 per bird $1.14 per dozen or $30.32 per bird $1.70 per dozen or $45.22 per bird $0.12 per dozen or $3.17 per bird Note: Arkansas Egg Company, as a family business with less than $25 million in revenue, used cash basis accounting for book and tax purposes. For purposes of this case, assume that revenue was produced after eggs are laid. Fixed and variable production costs were incurred evenly across the hen production cycle. Summers with 60,000 hens and revenue of $0.30 per dozen #Eggs per Dozen Marginal Marginal Contribution Total Week(s) Hen Week Eggs Costs Revenue Margin Doz Contribution Weeks Laid Margin 44-64 6 21 10.50 65-76 5 12 5.00 77 4 1 0.33 3 0.25 78 Thomas with 70,000 hens and revenue of $0.30 per dozen #Eggs per Dozen Marginal Marginal Contribution Total Week(s) Hen/Week Eggs Costs Revenue Margin Doz Contribution Weeks Laid Margin 49-64 6 16 8.00 65-76 5 5.00 77 4 1 0.33 78 3 0.25 Exhibit 1. Arkansas Egg Company Cost and Production Information Arkansas Egg aimed to collect 26.6 dozen eggs from each hen over its productive laying cycle of 55 weeks. If that happened, based on the contract price, then AEC recovered the costs of bringing the bird to its productive cycle (about 40 cents/dozen) as well as fixed overhead (about 16 cents/dozen). The approximate contribution margin during this time was 7%. After the breakeven point, the only costs incurred were the variable production costs. Information on hen life cycle Approximate life of hen 78 weeks Pre-productive period of hen life cycle First 23 weeks of life Productive period or laying cycle Last 55 weeks of life Average age of laying hens at Summers' barns 43 weeks Average age of laying hens at Thomas' barns 48 weeks Minimum production target (PT) over which to allocate costs 26.6 dozen Approximate costs based on 26.6 dozen production target Total pre-production cost through week 23 Fixed overhead cost (facilities, debt service, depopulation, etc.) Variable production costs (feed, transportation, labor, etc.) Total cost for producing organic cage-free eggs Expected profit at 26.6 dozen (7%) $0.40 per dozen or $10.64 per bird $0.16 per dozen or $4.26 per bird $1.14 per dozen or $30.32 per bird $1.70 per dozen or $45.22 per bird $0.12 per dozen or $3.17 per bird Note: Arkansas Egg Company, as a family business with less than $25 million in revenue, used cash basis accounting for book and tax purposes. For purposes of this case, assume that revenue was produced after eggs are laid. Fixed and variable production costs were incurred evenly across the hen production cycle