KENYA · GUIDE 0003 · EDITION 4.2
Managu Farming Profit: Cost per Accepted Bunch
Price the bunch the customer approved
An accepted managu bunch must have an agreed leaf-and-tender-shoot composition. A buyer’s preference can change how long sorting takes and how much material is rejected. Record gross harvested weight, material removed, completed bunches, accepted bunches, returns and cash received before calculating a cost per sale unit.
Example: account for bunches not accepted
The figures below are invented solely for arithmetic practice. They are not Kenyan market prices, a supplier quote, a yield forecast or evidence of actual farmer earnings.
| Fictional route | Amount |
|---|---|
| Bunches prepared | 60 |
| Bunches rejected or returned | 10 |
| Bunches accepted and paid for | 50 |
| Assumed selling price | KSh 30 per accepted bunch |
| Revenue | KSh 1,500 |
| Attributable crop, sorting, ties and delivery cost | KSh 1,000 |
| Contribution before separately allocated overhead | KSh 500 |
Direct cost per accepted bunch is KSh 1,000 ÷ 50 = KSh 20. Dividing by all 60 prepared bunches gives about KSh 16.67 and hides the cost of rejected output. The KSh 500 remaining is not final farm profit: fixed overhead and other applicable items still need consistent treatment.
Count the time to meet the specification
Record the time needed for competent planting-identity checks, selecting acceptable leaves and tender shoots, removing unwanted material and tying bunches. If the buyer changes the amount of stem allowed, remeasure sorting time and accepted output rather than retaining an old assumed cost. Include extra travel to collect empty crates or resolve a rejected delivery.
Separate revenue from cash collected
If only KSh 900 of the fictional KSh 1,500 has actually been collected, KSh 600 remains outstanding. It cannot pay for the next input until received. Track refunds and customer advances separately and confirm the invoicing arrangement through the applicable KRA guidance.
For a consistent period, contribution per accepted bunch equals selling price minus variable cost per accepted bunch. Divide fixed overhead by a positive contribution and round up for a simple break-even estimate. If the contribution is zero or negative, extra sales at that price do not create a meaningful positive break-even point. Replace every example value with real records and quotations.