nclude any benefits or taxes that 

 you pay as an employer when add- 

 ng up the hourly wage. (Inciden- 

 ally, the average hourly wage in 

 he Northeast region for green- 

 house labor was estimated at S8.15 

 n a recent survey by Greenhouse 

 Grower magazine.) In our gera- 

 nium example, we will assume that 

 all direct costs add up to $0.50. 



6. Add the overhead and variable 

 costs together (SO. 34 plus $0.50 

 equals $0.84). Estimate what pro- 

 portion of losses result from sec- 

 ond-grade plants or plants that are 

 not sold (e.g., one plant in 20, or 

 0.05). Multiply the overhead plus 

 variable costs by one plus propor- 

 tion of losses (e.g., $0.84 times 

 (1+0.05) equals $0.88) to give the 

 total cost of production. 



7. Subtract your total production 

 cost for the product from the sales 

 price to calculate the per unit 

 profit (e.g., $2.49 sales price minus 

 $0.88 production cost or $1.61 



profit). Multiply the number of 

 units sold times the net profit to 

 calculate your net income (e.g., 

 1000 geraniums times $1.61 equals 

 $1610). 



Everyone's costs are different, 

 and the geranium example is for 

 illustration purposes only. You 

 need to go through this process to 

 calculate your own square-foot-per- 

 week costs (probably somewhere in 

 the range of $0.15 to $0.30) and 

 variable costs. 



There are a couple of reasons 

 that I have presented this topic. 

 First, there are few better pieces of 

 information that you can have at 

 hand than knowing your costs of 

 production. The second reason is 

 that our floriculture research pro- 

 gram here at UKH is beginning to 

 focus on tools for financial analysis 

 and on greenhouse investment de- 

 cisions. 



PL Light Systems, a company 

 that produces high-pressure sodium 



lighting systems for greenhouses, is 

 generously funding a new research 

 project here at UNH. The project 

 will examine the economics of in- 

 stalling greenhouse lighting systems 

 for growers in the northern United 

 States and PL Light Systems will 

 be supporting a new graduate stu- 

 dent, Caroline Donnelly, to work 

 in this area. Another student, 

 Linda Bilodeau, will be working 

 on her master's degree this fall in 

 another greenhouse lighting-related 

 project. I am sure Caroline and 

 Linda will generate a lot of useful 

 information to share with our in- 

 dustry and I am excited about 

 working with them over the next 

 two years. 



Paul Fisher, Department of Plant 

 Biology, Spaulding Hall G-44, 

 University of New Hampshire, 

 Durham, NH 0^824, can be 

 reached by phone at 60^-882-4^2^, 

 by fax at 60^-862-47^/, or by email 

 at prf@hopper. unh. edu. 



^^^Pleasant 



' ™ INNOVATIONS IN Fl ( 



INNOVATIONS IN FLORICULTURE 



Growers of Proven Winners,™ Cottage Accents,™ and Cut & Grow Herbs^ 



Pleaseant View Gardens, Inc. 

 7316 Pleasant Street 

 Loudon, NH 03301 



Phone: 800-343-4784 

 Fax: 603-435-6849 



JUNEOUD' 1999 



