Growing tobacco on a small rural property: analysis of cost, volume and profit

Abstract

Most of the exported tobacco is grown in the South region, totaling 96.8% of national production. The crop is produced on small rural properties with an average area of ​​14.2 hectares. However, the management of small rural properties is deficient. The agricultural costs involved in production are little known, causing a deficiency in the management of the business. Rural farmers also need planning and budgeting to assist in decision making, in addition to having some knowledge of accounting tools. Considering the lack of these factors in rural areas, the objective of this article is to demonstrate in a managerial way what is the Cost, Volume and Profit of the tobacco culture in a small rural property located in the Municipality of Prudentópolis-PR. Through a qualitative and quantitative approach. As a result, it was identified that the property presented low profitability due to the high costs and low sales price obtained. Finally, with all the cost and expense data collected and organized, it is possible to calculate the cost and profit volume with a focus on the variable costing method. The value of the calculation of the Accounting, Economic-Financial Break-even Point was obtained, as well as the Safety and Contribution Margin, as well as the Operational Leverage that were presented to the farmers, since they did not have full control over the costs, they were unaware of the calculation of the depreciation known only to them as “possible wear and tear of the goods”.