Cost of Production Tool
The cost of production calculator is a tool kit to help you determine your CoP and compare performance annually.
How this will help you
- Determine your cost of production over a 12 month period.
- Track and compare your performance annually.
What you need
- Herd/flock records (number of animals per stock class)
- Sales and purchases records per stock class
- Tax statement
- Fixed and variable cost records by enterprise type (e.g. labour, supplements, transport)
- Kill sheets (to calculate dressing percentages)
For each enterprise type, indicate the number of animals at the beginning and the end of the calculation period, then add purchases and sales during the year to complete the stock balance. You will also be asked to assign inventory values including average weight for each stock class and $ values.
Add in direct expenses and supplement expenses for each enterprise type, then allocate relative values for all overheads and labour costs across your business (in case you have more than one type of animals).
Determine your cost of production for each enterprise type, its relative value across the whole business, and compare your performance from year to year. Cost of production provides an indication of the outlay required to produce each kilogram of meat for the enterprise types that are part of your business (cattle, sheep, or goat). Calculating your cost of production is an important step in assessing your performance and efficiency.