ABM 130 final exam
Wheat Enterprise Budget Fed Calves Use the following enterprise budget below to answer the associated questions Buddy is determining whether to feed calves. The facility has already been rented and the labor has already been hired. These are now fixed. Help Buddy determine Wheat Enterprise Budget (one acre, one year) what to do by answer the associated questions with the help of the information below Item Revenue Unit Quantity Price Amount Note: cwt stands for hundred weight (=100 lbs). Each steer weighs 1000 lbs or 10 Wheat grain bushel 52 $5.00 $260.00 cwt. Total Revenue $260.00 Revenue Operating Expenses (aka variable $99 /cwt 10 cwt/steer Seed 75 $0.20 $15.00 100 steers Fertilizer Chemicals, Fuel and Repairs acre 120 $0.32 $38.40 hour 1 $23.40 $23.40 Revenue $99,000 Labor 7 $8.00 $56.00 Costs Total Operating Expenses $132.80 Feed $23,000 Feeder cattle $71,000 Ownership Expenses (aka fixed costs) Vet and med $2 Machinery depreciation acre $14.20 $14.20 Power, fuel $2,400 Machinery interest acre Other ownership expenses (land) acre $10.60 $10.60 1 $56.50 $56.50 Rent $3,000 $3,000 Total Ownership Expenses Total Expenses $81.30 Hired Labor $214.10 Question 38 (3 points) Profit $45.90 What are total variable costs (TVC), total fixed costs (TFC), and total costs? TVC-$101,400; TFC= $3,000; TC=$104,400 Question 35 (3 points) TVC= $104,400; TFC= $0; TC=$104,400 What is the cost of production? TVC=$98,400; TFC=$6,000; TC=$104,400 ONone of the above Oa. $2.55/bu Ob. $4.12/bu Question 39 (3 points) c. $214.10/acre What are average variable costs (AVC), average fixed costs (AFC), average total costs (ATC)? Question 36 (3 points) AVC- $1,014/head or $101.40/cwt; AFC= $300/head or $3/cwt; ATC=$1,044/head or $104.40/cwt What is the break-even yield? AVC=$1,044/head or $104.40/cwt; AFC= $0/head or $0/cwt AVC- $984/head or $/98.40cwt; AFC- $60.00/head or $6.00/cwt; a. 42.82 bu/acre ATC-$1,044/head or $104.40/cwt Ob. 16.20 bu/acre ONone of the above c. 52.00 bu/acre Question 40 (3 points) What should Buddy do? Question 37 (3 points) What is the break-even price? Feed the calves; he should produce e MR-MC to earn a profit. OFeed the ca to minimize his loss. Oa. $2.55/bu He should not feed the ca ill equal the fixed costs. O b. $4.12/bu He should not feed the calves that way he will not lose any money. c. $5.00/bu Od. $214.10/acre True False Questions Question 49 (2 points) True or False: An Income Statement is a financial snap-shot of the farm business Question 41 (2 points) calendar year). while a Balance Sheet describes the time between income statements (usually the True or False: A risk premium should be added to the discount rate when evaluating higher risk investments. True False True False Question 50 (2 points) Question 42 (2 points) True or False: Given the basic accounting equation of Owner's Equity = True or False: Payback period, simple rate of return, and net present value methods Liabilities, a business manager would be most interested in seeing his/her Owner's of analyzing capital investments will always agree on which investment is preferred Equity increasing over time. True True False False Question 43 (2 points) Question 51 (2 points) Sweet potato farmers working around the clock to quickly pull their sweet potatoes True or False: Net farm income from operations is always less than net farm income. decision. (harvest) before Hurricane Florence reached landfall is a strategic management True False True False Question 52 (2 points) Question 44 (2 points) True or False: A farm business can show a loss (negative profit) but still have positive cash flows. True or False: All costs are fixed in the in long-run. True True False False Question 45 (2 points) Question 53 (2 points) True or False: Enterprise budgets should include opportunity costs. If so, then the True or False: If your employer pays you an hourly wage of $20/hour then it costs profit reported is economic profit. the company $20/hour to have you as an employee. True False True False Question 46 (2 points) If a hog producer decides to rebuild their hog lagoon levees with new technology so Question 54 (2 points) decision that the waste does not spill over when flooding occurs is a strategic management True from now . True or False: $1,000 of income today is worth the same as $1,000 of income a year False True Question 47 (2 points) False True or False: The most common form of farm busine proprietorship. Question 55 (2 points) True False True or False: A $5,000 tax deduction is preferred to a $5,000 tax credit. Question 48 (2 points) True True or False: The process of making decisions about the allocation of scarce False resources in agricultural production for the purpose of meeting certain management goals, is a good definition of Farm Management. True False
