| The greenhouse/nursery industry is an important component of agriculture within the Southeastern United States with cash receipts of approximately ;For this analysis, job-cost accounting procedures were used to allocate annual fixed costs and general overhead expenses to various production processes. Commercial accounting software was used to perform the allocation.;Results showed that fixed cost represented approximately one-third of total cost per plant for each variety and production method. Previous studies had generally allocated fixed costs in such a manner as to achieve a wide variation in the percentage of fixed cost to total cost per plant among the different varieties.;Further analysis was done to determine the effect plant mix had upon the allocation of fixed costs. To perform this analysis a simulation model was developed to duplicate the allocation method used by the job-cost software without having to recreate detailed financial records for each plant mix.;As production shifted from the usual (preferred timing of operations) to the alternate (delayed timing of operations) method of production, with total output held constant, fixed cost per plant by production method decreased for all varieties for usual and alternate; thus, total cost per plant also decreased. However, the alternate method was a more expensive production method than the usual method, so net income decreased. Likewise, when production shifted toward production of more Burford hollies, usual or alternate, while decreasing production of other varieties, total cost per plant by production method decreased for all varieties; but, net income also decreased.;When total plant production was increased for all varieties from 204,800 to 307,200 plants, a fifty percent increase, fixed cost per plant decreased an average of twenty-seven percent for each variety. Total cost per plant decreased by ten percent. Thus, for every ten percent increase in total production, total cost per plant decreased by two percent for each variety. |
