Question

9. Suppose you create an enterprise budget for corn and assume the output price per bushel is $2.25 and the yield is 180 bushels per acre. The total operating expenses are $250 and the total fixed costs are $145. What is the net profit per acre? a. $405 b. $155 c. $145 d. $10 e. none of the above 10. Suppose you create an enterprise budget for corn and assume the output price per bushel is $2.25 and the yield is 180 bushels per acre. The total operating expenses are $250 and the total fixed costs are $145. What is the break-even yield? a. 180 b. 175.56 c. 111.11 d. 2.19 e. none of the above 11. You have 200 pigs to market at 290 lbs. each Overhead costs total $10,000. Feed costs are $8 per pig and other costs are $2 per pig. What price per pound is needed to breakeven? a. $0.18 b. $0.21 c. $0.23 d. $0.35 e. none of the above 12. Consider a farmer who plans to sell a group of steers this week but wonders if feeding them for another week before selling them would be more profitable. During these 7 days, the steers are expected to gain 10 pounds from 1250 to 1260 pounds. The price is $1.00/lb. and is expected to be constant. Feed costs $25.00 per one hundred pounds of gain. Labor and other costs are $0.50 per steer per week. The opportunity cost (lost interest) of not selling the steer this week is 10% on an annual basis. Analyze this problem (keeping the steers an additional week) in a partial budget format. Note: it will be easiest to do these calculations in a $/steer basis. What are the reduced expenses? a. $1250 b. $1260 c. $10 d. SO

Answer 1

Given Output price per bushel Yeild per acre Total operating expenses Total fixed cost 2.25 $ 180 Bushel 250 $ 145 $ Solution Particulars Sales per acre (output price X Yeild per acre) Less: Total operating expenses Less: Total fixed cost Net profit per acre Amount 405 250 145 Hence, option D $10 is correct Note: Assumed that there is only 1 acre of land, total operating and fixed cost is incurred for this 1 acre land *Note: We are allowed to answer only one question