Question

In: Operations Management

Calculate total costs of marketing a commodity with the given hypothetical data for mango. Producer costs...

Calculate total costs of marketing a commodity with the given hypothetical data for mango. Producer costs Activity Cost ($) Land preparation 5 Plant protection 4 Irrigation 2 Sorting and grading 3 Transportation 4 Loading and un loading 2 Labor charges 2 Costs of middlemen $0.5 Costs of wholesaler $0.75 Costs of retailer $0.4

PLEASE ANSWER IT ONLY IF YOU ARE SURE ABOUT THE ANSWER. I HAVE POSTED IT EARLIER ALSO BUT I COULD NOT GET THE CORRECT ANSWER

Expert Solution

Formula to calculate marketing costs is C = Cf + Cm1 + Cm2 + . . . + Cmn

Where Cf is cost incurred by producer from the production till the produce it brought to market.

Cm= costs incurred by middle men.

Costs incurred by producer are of two types: production costs and post-production costs

Activity	Cost ($)
Land preparation	5
Plant protection	4
Irrigation	2
Sorting and grading	3
Transportation	4
Loading and un loading	2
Labor charges	2

These costs must be segregated because we are concerned about post production costs. Post production costs are sorting and grading; transportation; loading and unloading.

Therefore producer costs= 3+ 4+ 2= 9

Cf= $9

Cm1 (Costs of middlemen) = $0.5

Cm2 (Costs of wholesaler) = $0.75

Cm3 (Costs of retailer) = $0.4

Cm1+Cm2+Cm3= 0.5+0.75+0.4= 1.65

Marketing costs= Cf + Cm1 + Cm2+Cm3

= 9+ 1.65= 10.65

Therefore marketing costs are $10.65

keosha answered 4 months ago

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