AMA

AMA

XS Question 11: On a farm of 200 hectare, a farmer plans to use 100 hectare for raising Crops hectares for growing founder and the balance of 80 hectares for grazing milk cattle. For raising crop, seeds will cost ? 50 per hectare and the fertilisers? 70 per hectare. The yield will be 30 tonne per hectare, which would be sold at 50 per tonne. The fodder will cost ? 20 per hectare for seed and 50 per hectare for fertilizers. The fodder produced will be fed to the cows. On the 80 hectares, 40 milking cows will be kept. In additions the fodder, other feeding stuffs will cost 20,000 in all for the year. It is expected that each cow would produce one call, which will be sold at 100 each together with an annual milk yield sold at 1,200. The resale value of the cow would be diminishing at the rate of 100 per annum. Other farm costs (which are unlikely to change, whatever the farm is put to use are per annum. . Farm workers wages 36,000 Rates and taxes *24,000 General charges 30,000 A suggestion is made that fodder should be purchased instead of being grown. If this is done, it is estimated that fodder will cost 250 per cow per annum. (1) Prepare statements to indicate to the farmer, whether the fodder should be purchased or grown and released land may be utilized either for raising crop or grazing milk cattle. Adonted from ICMA LONDON)