KENYA · GUIDE 0001 · EDITION 4.2
Sukuma Wiki Profit per Kilogram: Cost and Break-Even Method
Profit depends on paid, accepted output
Use a consistent sale unit. If a buyer pays per bunch, define the bunch with that buyer and record its actual weight for internal comparison. Do not compare a bunch price with a kilogram cost as though the units were interchangeable. Track grown, harvested, packed, accepted and paid quantities separately.
Work through a loss-adjusted example
The following values are invented to demonstrate the calculation. They are not Kenyan market prices, a crop-yield forecast or a recommended selling price.
| Hypothetical delivery | Value |
|---|---|
| Harvested leaves | 100 kg |
| Rejected before dispatch | 15 kg |
| Returned or rejected at buyer | 5 kg |
| Accepted and sold | 80 kg |
| Invented selling price | KSh 40/kg |
| Sales value | KSh 3,200 |
| Invented attributable crop and delivery costs | KSh 2,400 |
| Contribution before separately allocated overhead | KSh 800 |
The attributable cost per accepted kilogram is KSh 30, calculated as KSh 2,400 divided by 80 kg. Dividing the same cost by 100 kg would produce KSh 24 and hide the effect of losses. The KSh 800 contribution is not the final farm profit: fixed costs and other applicable items remain to be accounted for consistently.
Separate contribution from cash available
If the buyer pays only KSh 2,000 today, KSh 1,200 remains unpaid. You cannot spend the full KSh 3,200 as though it were collected. Put the outstanding amount and expected collection date into the cash schedule. Separately track money advanced for an uncompleted order and refundable deposits.
Test the break-even question
Contribution per accepted kilogram equals the selling price minus the variable cost per accepted kilogram. Divide fixed overhead for the same period by a positive contribution to estimate break-even accepted sales. If contribution is zero or negative, a positive break-even quantity cannot be calculated from that model.
Recalculate after a route change, labour quotation, water interruption, price change or altered return agreement. Check invoicing treatment through KRA's appropriate official route. A spreadsheet can perform the arithmetic; only real records and quotations can validate the inputs.