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Question 3 Rebecca is considering setting up in business as a toys of organic, free-range eggs. The local farm shop has agreed to buy her
Question 3 Rebecca is considering setting up in business as a toys of organic, free-range eggs. The local farm shop has agreed to buy her eggs at 30 pence each, provided the minimum quality threshold is reached Rebecca has worked out the following cost and revenue information: . Rent for a 2,000 square metres field with suitable housing for the hens is available at a cost of 2,000 a year. Power for the year will cost 1,000. Water for the year will cost 400 Rebecca's hens need 2 square metres of space each and she wants to buy the maximum number possible at 3.50 each. Rebecca received a discount of 10% from the supplier if she pays in cash, and decides to take advantage of it. The hens cost her 9 pence a day to feed. The hens have a useful life of two years after which the local pet food factory will come and collect them for free. Rebecca expects the hens to lay an egg on 85% of the days in a year in both year 1 and year 2, since no food supplement can be given to the hens. Rebecca estimates that each worker will be paid 10/hens to look after the birds, considering a relevant range of 800 hens/ worker Rebecca intends to pay herself a salary of 15,000 per year. . You are required to: get for Rebecca for the first year, incl ing costs by category and projected a) Prepare a profit/loss. [14 marks] b) Calculate how many eggs Rebecca needs to produce to break-even in her first year
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