Operating costs (per acre). Round values to the near $.01. a. Repairs: (assume repair costs to be 0.5% of the list price, for each 100 hours of use) Average repair cost per acre = .005 x list price x 30 hrs acre for harvesting / 100 acre b. Fuel costs: 1.25 gallons used per acre x fuel cost per gallons acre Lubrication costs: Lubrication costs are usually calculated as 15% of the fuel costs per acre. d. Labor costs: Labor requirements for the size 1 combine are hours per acre, including travel, hauling and storing (average of corn and soybeans). /acre 925 hours /acre @ $12.00 e. Total operating costs per acre Total of ownership and operating costs per acre acre acre Custom Hire Costs If crops are custom harvested, you have to pay the custom operator $35 / acre. $35.00 In addition, you have to supply 35 hours (average for corn and soybeans) of labor for hauling and storing, at $12 per hour. acre Total cost of custom hiring. S per acre S acre Which is cheaper, owning or custom hiring? Calculate the breakeven number of crop acres you would need to justify owning a combine that is, the number of acres for which costs of owning would be just equal to those for custom hire. Use acres (A) as your unknown value and solve for acres. Page 440 has an example. Show your work. ownership costs, S/year + (total operating costs, S/acre, x A) = (total custom hire cost, S/acre, x A) x Acres) =( x Acres) Acres