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An SME processes maize into mealie meal. It buys maize at K180 per 50kg bag and sells mealie meal at K200 per 25kg bag, and maize bran at K60 per 30 kg bag. Moreover, the following additional information is given:

(a) One 50kg bag of maize yields 35kg of mealie meal and 10kg of maize bran and the remaining 5 kg is lost through inefficiency (b) One bag of maize grain has additional costs of K20 per kg bag (c)The SME processes 2,000 bags per month (d)The fixed costs per year are estimated at K1,000,000 (e)The business period is from January to December.

You are required to determine the following:

(a)unit variable costs per metric tonne of maize grain

(b)unit revenue per metric tonne of maize grain

(c)total revenue per monthly tonage

(d)total variable costs per monthly tonage (e)Plot the graph of total revenue and total costs against volumes of maize grain by month for the 12 months of the year (use a standard graph paper)

(f)From the graph, determine the breakeven point, total revenues, total costs and total profits

(g)Suppose that in April, maize grain price rises by K25 per 50kg bag, drops by K10 per 50kg bag August, and rises again by K30 in October while mealie meal price rises by K40 in September, show this information on the same graph, determine the changes in the breakeven point, total revenue, total costs and total profits of the SME

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