Grosbeck Cattle Company has gathered the following information about operations for the past year.

	Year 1
Cow herd size	120
Revenues from sale of calves	$108,000
Feed	18,200
Labor (1 cowboy per 120 cows)	24,000
Cow depreciation	15,300
Bull depreciation (1 bull per 30 cows)	1,698
Medications/vaccinations	3,120
Land lease	11,000
Operating income	30,633

(a) Determine the "per unit" cost table on the preprinted worksheet.

(b) How much is the per-cow contribution margin?

(d) Assuming Mathew's land will support a herd of 360 cows, project anticipated profits. Why is the

profit more than twice as much as the amount that is earned on a herd size of 120 cows?

A.

7(a) Feed variable costs	$154
7(a) Cow depreciation variable costs	$129
7(a) Medications vaccinations variable costs	$28
7(a) Land Lease fixed costs	$91.90
7(a) Labor fixed costs (1 cowboy per 120 cows)	$221.00
7 (a) Bull depreciation fixed costs (1 bull per 30 cows)	$16.15
7(b) Contribution margin per cow	$598
7(d) Operating income	$126,446

B.

7(a) Feed variable costs	$150
7(a) Cow depreciation variable costs	$122
7(a) Medications vaccinations variable costs	$23
7(a) Land Lease fixed costs	$90.67
7(a) Labor fixed costs (1 cowboy per 120 cows)	$180.00
7 (a) Bull depreciation fixed costs (1 bull per 30 cows)	$12.15
7(b) Contribution margin per cow	$545
7(d) Operating income	$123,046

C.

7(a) Feed variable costs	$146
7(a) Cow depreciation variable costs	$123
7(a) Medications vaccinations variable costs	$16
7(a) Land Lease fixed costs	$87.67
7(a) Labor fixed costs (1 cowboy per 120 cows)	$180.00
7 (a) Bull depreciation fixed costs (1 bull per 30 cows)	$12.15
7(b) Contribution margin per cow	$425
7(d) Operating income	$126,046

D.

7(a) Feed variable costs	$146
7(a) Cow depreciation variable costs	$108
7(a) Medications vaccinations variable costs	$36
7(a) Land Lease fixed costs	$95.67
7(a) Labor fixed costs (1 cowboy per 120 cows)	$250.00
7 (a) Bull depreciation fixed costs (1 bull per 30 cows)	$14.15
7(b) Contribution margin per cow	$595
7(d) Operating income	$126,046

E.

7(a) Feed variable costs	$152
7(a) Cow depreciation variable costs	$128
7(a) Medications vaccinations variable costs	$26
7(a) Land Lease fixed costs	$91.67
7(a) Labor fixed costs (1 cowboy per 120 cows)	$200.00
7 (a) Bull depreciation fixed costs (1 bull per 30 cows)	$14.15
7(b) Contribution margin per cow	$595
7(d) Operating income	$126,046