Accounting Homework

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 Unit Quantity |Price Amount Revenue Note: cwt stands for hundred weight (=100 lbs). Each steer weighs 1000 lbs or 10 Wheat grain 52 $5.00 $260.00 cwt. bushel Total Revenue $260.00 Revenue Operating Expenses (aka variable $99 /cwt costs) 10 cwt/steer Seed 16 75 $0.20 $15.00 100 steers Fertilizer 1b 20 $0.32 $38.40 Total Chemicals, Fuel and Repairs acre 1 $23.40 $23.40 Revenue $99,00 Labor hour 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 $2,000 Machinery depreciation acre 1 $14.20 $14.20 Power, fuel $2,400 Machinery interest acre $10.60 $10.60 $3,000 Other ownership expenses (land) acre 1 $56.50 $56.50 Rent Hired Labor $3,000 Total Ownership Expenses $81.30 Total Expenses $214.10 Profit $45.90 What are total variable costs (TVC), total fixed costs (TFC), and total costs? O TVC=$101,400; TFC= $3,000; TC=$104,400 O TVC= $104,400; TFC= $0; TC=$104,400 What is the cost of production? O TVC-$98,400; TFC=$6,000; TC=$104,400 None of the above a. $2.55/bu Ob. $4.12/bu What are average variable costs (AVC), average fixed costs (AFC), average total costs O c. $214.10/acre (ATC)? 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 ATC=$1,044/head or $104.40/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 O b. 16.20 bu/acre ONone of the above c. 52.00 bu/acre What should Buddy do? What is the break-even price? O Feed the calves; he should produce where MR=MC to earn a profit. Feed the calves; he should produce where MR-MC to minimize his loss. O a. $2.55/bu He should not feed the calves. His loss will equal the fixed costs. Ob. $4.12/bu O He should not feed the calves that way he will not lose any money. O c. $5.00/bu O d. $214.10/acre