Rose Hill, a soybean farm in northern Minnesota, has a herd of 33 dairy cows. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Rose Hill, a soybean farm in northern Minnesota, has a herd of 33 dairy cows. The cows produce approximately 1,820 gallons of milk per week. The farm currently sells all its milk to a nearby processor for $1.25 per gallon, a significant drop from the $2.00 per gallon they were able to charge five years ago. It costs $1.60 per gallon to produce the milk. The owners of Rose Hill are deciding whether to sell the dairy cows or expand into the artisan cheese market. Both owners have prior cheese-making experience and they already have all the needed equipment. It takes 0.8 gallons of milk to make a pound of cheese. Costs to produce a pound of cheese are expected to total $7 per pound. Artisan cheeses are currently selling for $10 per pound at farmer's markets and upscale groceries. a. How much incremental profit would Rose Hill recognize if half the milk each week was used to make cheese? b. How much, in total, would Rose Hill earn each week if half the milk was used to make cheese and half was sold to the processor? c. How much of the milk would need to be used to make cheese each week in order for Rose Hill to break even on its dairy operations assuming no cows were sold? (Note: Any milk not used to make cheese would still be sold to a processor.) Note: Do not round your answers. gallons of milk used to make cheese gallons of milk sold to a processor Rose Hill, a soybean farm in northern Minnesota, has a herd of 33 dairy cows. The cows produce approximately 1,820 gallons of milk per week. The farm currently sells all its milk to a nearby processor for $1.25 per gallon, a significant drop from the $2.00 per gallon they were able to charge five years ago. It costs $1.60 per gallon to produce the milk. The owners of Rose Hill are deciding whether to sell the dairy cows or expand into the artisan cheese market. Both owners have prior cheese-making experience and they already have all the needed equipment. It takes 0.8 gallons of milk to make a pound of cheese. Costs to produce a pound of cheese are expected to total $7 per pound. Artisan cheeses are currently selling for $10 per pound at farmer's markets and upscale groceries. a. How much incremental profit would Rose Hill recognize if half the milk each week was used to make cheese? b. How much, in total, would Rose Hill earn each week if half the milk was used to make cheese and half was sold to the processor? c. How much of the milk would need to be used to make cheese each week in order for Rose Hill to break even on its dairy operations assuming no cows were sold? (Note: Any milk not used to make cheese would still be sold to a processor.) Note: Do not round your answers. gallons of milk used to make cheese gallons of milk sold to a processor
Expert Answer:
Answer rating: 100% (QA)
Answer a To find the incremental profit from making cheese with half the milk we first need to calcu... View the full answer
Related Book For
Understanding Business Ethics
ISBN: 9781506303239
3rd Edition
Authors: Peter A. Stanwick, Sarah D. Stanwick
Posted Date:
Students also viewed these accounting questions
-
Crystal Glassware Company has the following standards and flexible-budget data. Standard variable-overhead rate Standard quantity of direct labor Budgeted fixed overhead Budgeted output Actual...
-
Pete Patel is the sports liaison for the student government association. During the fall semester, the group promotes school spirit with "orange effect" t-shirts. The shirts feature a special...
-
Rodriguez Corp. changed from the straight-line method of depreciation on its plant assets acquired in early 2021 to the double-declining-balance method in 2023 (before finalizing its 2023 financial...
-
Q8 Question: 9 A small particle of mass m moving inside a heavy, hollow and straight tube along the tube axis undergoes elastic collision at two ends. The tube has no friction and it is closed at one...
-
Vince Tomano, a real estate agent, requires you to prepare an income statement for the period ended 31 December 2014: donations $100; office wages $7000; sales salaries $25000; sales commission...
-
Two batteries with emf E1 and E2 and internal resistances r1 and r2 are connected in parallel. Prove that if a resistor is connected in parallel with this combination, the optimal load resistance...
-
Explain the application of the cost principle to the purchase of common shares in another company.
-
Assume the facts in E13-5, except that Matthewson Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without...
-
For the function f(x) shown in the graph below, sketch a graph of the derivative. You will then be picking which of the following is the correct derivative graph, but should be sure to first sketch...
-
Question 20 Not yet answered Marked out of 1.2 Flag question XYZ Company is working on its direct labor budget for the next quarter (January, February and March). Each unit of product requires 0.4...
-
What audit tasks can be accomplished with word processing software? Spreadsheet software?
-
Audit programs should: a. Summarize the nature, timing, and extent of audit procedures applied. b. Be prepared for all financial statement accounts. c. Be prepared by audit partners. d. Be prepared...
-
In addition to the planning matters considered in a manual accounting system, what additional ones should be considered when computer processing is involved?
-
Describe how QuickZoom gives you more information about a balance sheet.
-
The working papers an auditor prepares in a financial statement audit are: a. Owned by the auditor. b. Owned by the audit client. c. The principal support for audit conclusions. d. Retained in the...
-
Vertical Analysis of Income Statement For 2012, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $17,000 for advertising. At the end of the year,...
-
Use multiplication or division of power series to find the first three nonzero terms in the Maclaurin series for each function. y = e x2 cos x
-
Identify four ways in which the independence of an auditor of a large listed company may be strengthened. E1
-
Why have institutional shareholders become more active in corporate governance issues in recent years? R4
-
What are the benefits of separating the roles of chairman and chief executive? R2
Study smarter with the SolutionInn App