THE REALITIES ABOUT POULTRY The Modern Farm - The Realities About Poultry_Seco | Page 157

5. The parent stock to be maintained at 100. All the females except the parent stock to be for egg
production.
6. We shall render all the female birds off-layers at the end of the year and all shall be sold off.
7. We assume that 80% of the laying birds will give us eggs per day.
8. We take an average of 64 trays from 1,920 birds per week.
9. We shall rear kuroilers or local breeds.
10. Medical expenses shall be computed at UGX 500 per bird in the second year of the project.
11. Transportation shall be increased by 1% each year.
12. We shall assume a 1% provision of the total revenue per year to cater for miscellaneous
expenses.
Break-Even Analysis for a Poultry Project
One of the most important indicators of success of a poultry project is the time from starting the
project till the moment when revenues of product sales equals the total costs associated with the sale
of the product – it is also called break-even point. In other words profit = 0. Break-even analysis is
an accounting tool to help plan and control the business (poultry project) operation.
In carrying out break-even analysis for a poultry project, there are certain terms that a farmer needs
to be aware of. These include:
(a) Break-even analysis: Break-Even Analysis is a useful tool to study the relationship between
fixed costs, variable costs and returns.
(b) Break-Even point (B.E.P): Break -even point is a point at which a firm does not make profit
or incur losses. At break-even point Total Revenue (TR) = Total Cost (TC). At Break-even
point the profit is zero (0). Graphically, break-even point is where the sales revenue and total
costs lines cross.
Break-Even Point =
Fixed Costs
(Selling Price-Variable Cost per Unit)
(c) Selling Price (P): The price at which a product is offered for sale. The selling price needs to
cover the basic direct costs of running a poultry project. To make a profit a farmer also needs to
add something for the indirect or fixed costs (overheads) of the project and the profit he or she
wants to make to safeguard and expand the poultry project.
(d) Break-even units (X):
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