Milko owns dairy cattle. The market value of the cattle is calculated by reference to the litres of milk able to be produced and the lactation rate of the cows. The cattle are regularly sold at auction. Costs incurred to transport the cattle to auction are $500 per truck. Each truck can transport approximately 100 cattle.

Number of mature cows held at 30 June 2013 5000

Average litres of production per cow 6000 litres

Lactation rate 50%

Price per litre 40 cents

The market value for each cow at 30 June 2013