Calculating Number of chicken in California in 1975

Heading Description Amount

Number of farms to be targeted in California 521
Number of chickens on these farms in 1969 39929680

California

Number of chickens on these farms in 1975 41799665

Variable Costs Description Amount

Cost of Mold Payment per mold with life of 15 million pairs 12000
Payment per pair 0.0008
Cost per Pair Price paid to New World per pair 0.032
Cost of Box (Filling, Shipping, etc.) 0.00168
Total Cost price per pair 0.0345

Fixed Costs 50% penetration Amount

Description
Fixed cost of west coast office 196000
Headquarter Expense 184000
Number of Sales person Needed 7
Technical Representation 2
Cost of Salaries for Sales people and Technical Repre 350000
Marketing and Trade Show Expenses 200000
Payment to New World 25000
Total Fixed Cost 955000

Amount saved per chicken

Description per year
Reduced Mortality Rate 0.1175
Yearly Savings Reduced feed consumption 0.224913
per chicken due Reduced Labor Requirement 0.000758
to Reduced Trauma 0.106
Total Savings 0.4491

Contribution (SP-Variable
SP Cost)
Scenario 1 0.08 0.046
Scenario 2 0.1 0.066

Assumptions on Demand: As price increases, demand goes down

SP
SP 0.08 0.1
Demand (as %
of total market) 50% 45%
 Demand for the
Break Even (Fixed Cost/Contribution)Market Share Needed given SP (%)
20,979,789 50% 50%
14,575,702 35% 45%
Demand in
Pairs Total Contribution
20899832.507 951,360.38
18809849.256 1,232,421.32