The table below represents production output and cost distribution per animal in two feedlots - NSC Agricultural Sciences - Question 3 - 2023 - Paper 1
Question 3
The table below represents production output and cost distribution per animal in two feedlots.
| FEEDLOT | OUTPUT PER ANIMAL | INPUT COST PER ANIMAL (FEED) | INPUT ... show full transcript
Worked Solution & Example Answer:The table below represents production output and cost distribution per animal in two feedlots - NSC Agricultural Sciences - Question 3 - 2023 - Paper 1
Step 1
3.1.1 Indicate the feedlot that operates at the highest cost.
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Answer
Feedlot 2 operates at the highest cost, with an input cost per animal for feed amounting to R750, compared to R600 for Feedlot 1.
Step 2
3.1.2 Determine the feedlot that operates in the most cost-effective way.
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Answer
Feedlot 1 operates in the most cost-effective way, as it has a lower total input cost while providing a slightly higher output.
Step 3
3.1.3 Explain the answer to QUESTION 3.1.2 by referring to the table above.
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Answer
Feedlot 1 has an output of R1 720 with total costs (feed and other) amounting to R600 + R180 = R780. Feedlot 2 has an output of R1 680 with total costs of R750 + R60 = R810. Despite Feedlot 2 having higher costs, Feedlot 1 achieves a greater output for a lower input cost, making it more cost-effective.
