Question

Crop Acres 122 REVENUE Cotton Lint Cottonseed Total Revenue Quantity 1.250.00 0.89 Units Pound Ton S/Unit $0.63 $165.00 Total $787.50 $146.44 393394 Quantity Units S/Unit Total 1250 39.0625 Pound CWT Acre Acre $0.08 $2.90 $4.75 $9.00 $100.00 $113 28 $4.75 $9.00 1 50 125 Pound Pound $0.64 $0.38 $32.00 $47.50 10. IMMIT 1 1 1 0.2 Acre Acre Acre Acre $9.50 $4.50 $25.00 $15.00 $9.50 $4.50 $25.00 $3.00 1 25 Acre Bale $12.00 $0.00 $12.00 $0.00 1 Acre $40.00 $40.00 Seed VARIABLE COSTS Production Costs Custom Strip and Module - Cotton Ginning - Cotton Fertilizer Application - Liquid High Scouting Fertilizer Fertilizer (P) - Liquid Fertilizer (N) - Liquid Herbicide Herbicide - Cotton Preplant Herbicide - Cotton At Plant Herbicide - Cotton Postplant Spot Spray and Chemical Insecticide Insecticide and Apply Cotton Boll Weevil Assessment irrigated Miscellaneous Crop Insurance Cotton - Irrigated Seed - Cotton Irrigated Other Chemicals Harvest Aid Apply Cotton Irrigated Other Labor Hoeing Irrigation Energy Cost Irrigation Labor Machinery Labor Tractors/Self-Propelled Other Labor Diesel Fuel Tractors/Self-Propelled Gasoline Pickup/General Use Equipment Repairs & Maintenance Pickup/General Use Equipment Irrigation Equipment Tractors/Self-Propelled Implements Interest on Credit Line Total Variable Costs Planned Returns Above Variable Costs: 40 Thousand $1.59 $63.60 1 Acre $25.00 $25.00 0.2 Acre $15.00 $3.00 12.00 Acreinch 1.00 Hour $10.00 $12.00 $120.00 $12.00 0.74 0.80 Hour Hour $12.00 $12.00 $8.88 $10.32 4 Gallon $1.90 $7.00 1 Acre $4.40 1 1 1 1 Acre Acre Acre Acre $0.50 $21.00 $6.00 $3.00 6.00% $4.40 $0.50 $21.00 $0.00 $3.00 $15.42 SEUS $23260 Quantity Units Unit Total FIXED COSTS Equipment Fred Costa Pickup/General Use Equipment Irrigation Equipment Tractors/Self-Propelled Implements Management Fee, Owner/Operator Labor Cash Rent - Cotton Irrigated Whole Farm Insurance Total Fixed Costs Total Specified Coats 1 1 1 1 1 1 1 Acre Acre Acre Acre Acre Acre Acre $1.25 $55.00 $12.00 $10.00 $25.00 $100.00 $2.00 $1.25 $55.00 $12.00 $10.00 $25.00 $100.00 $2.00

Answer 1

Solution P.No.1 D for Breakeven price, we need to find the Contribution mangin which is equal to fixed Costs. » Contribution margin - Price per unit x number of units solda variable cost per unit x number of units sold. » Contribution margin = (price - Variable Cost) x units Since, we know the units sold of primary Produd Cotton lint, which is 1950, using it in formala. Moreover, we know the total variable costs and dividing it with number of units will be variable Cost per unit CM -(P-701.95/1250) * 1350 As we need to breakeven, :: CM: fixed costs of 205.95 => 205.25 (P- fol. 95/1950) po 205.85/1250 + 701.95|1950 X 1250

P.2 Price for Breakeven = 0.7050 or $0.73/16 flence, price for breakeven is/ $0.73/16 which is the option (a) g for breakeven yield at units, we will again use Contribution margin = fixed costs formula, however, we don't know the number of units > Contribution margin = (price-variable Cost) x units Talking price and total variable costs from the given data CM: (0.63- 701.as/unit) x units Now equalizing cm with fixed Costs (dos.as) to Solve for number of units 305.95 = (0,63 – Fol.as/ units) x units -> Jos.asa 0.63 X units tol.25 => 0.63 x Units = gos.ast tol.95 => units = 906.5 1,438.89 1b 0.63 Hence, yield required for breakeven is 11,438.89 1b which is option (6)