Question

Pure Milk owns dairy cattle. The market value of the cattle is calculated by reference to the litres of milk able to be produced and the lactation rate of the cows. The cattle are regularly sold at auction. Costs incurred to transport the cattle to auction are $1500 per truck. Each truck can transport approximately 100 cattle. Number of mature cows held at 30 June 2018 8000 Average litres of production per cow 5000 litres Lactation rate 70% Price per litre 30 cents The market value for each cow at 30 June 2018 is:

$1000.

$1050

$1500.

$1680

Answer 1

Market value for each cow

= Average litres of production per cow * lactation rate * price per litre

= 5,000 * 70% * 0.30

= 1050

Option B