AGB322 s01 midterm2 - AC AL fl Midterm 2 AGB 322 Spring...

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Unformatted text preview: AC; AL. fl Midterm 2 AGB 322 Spring 2001 Name _ M, 1. List the three economic questions that farm managers face, and write the corresponding budget and model that goes with each question. (15) WW iv W? PWIPW—swma {50m m [pa/am Hear Mbp/Mfilw/oflpujagm (9441191219 aw is W? QlW/Wepmliai degfl 2. You operate a small farm on the coast where lettuce and cabbage are both popular crops. You have 10 acres of prime land. If the price of cabbage is $4.95 per box, and the price of lettuce is $6.70 per box, what combination of cabbage and lettuce should you produce? (15 points) Lettuce (50# box) —— Cabbage (5 0# box) MRS ——— 3980 _ 2920 " _!-—H_ 1590 —Lfl-.:IO— .- .I II' ‘7 l" A c, - P £— (49 .7 Lettucelalzo ‘ Cabbage 63330 b L PC. 410] “ I 3.. What type of enterprise relationship is shown between lettuce and cabbage (complementary, supplementary or competitive) and why? WWM tel/Tamera W,WQW 3. You are considering purchasing a new feed wagon. The following items are expected to change as a result of purchasing the wagon. (25 points) Fuel use will increase 2 gallons per day. Fuel costs $1.48/gallon / Labor use will decrease 6 hours per day. Labor costs $10.50 per hour / Rate of gain on steers increases 0.15 pounds per day on 10 000 head Steers sell for $.68 per pound. Feed expense will increase by 2 pounds per head per day. Feed cost is $92 per ton. Repair expense will increase by $6.13 each hour the feed wagon is used. Daily use will be 11 hours per day. - Depreciation expense will increase by $12,200 per year. 0 Interest costs on the investment of the feed wagon will be $6,200 per year. Use a partial budget to analyze this decision to find the annual costs and revenues that will result from purchasing the feedlv?gon. Assume all animals are fed 365 days. W W DIM/imam C6312; .15(to.ooo)(.as): 1,020 K DW Curb - Inn/wane £9315 (9x103) : 03 1,-4st =$Zfio 2 ((0,000): 20,000 +4001): {0x012 : 92-0 6.13m r 07.43 [limo—+3605: 33+; B .l :Ioaffi 6,200 +395M“ Cent; :IO‘togO .'0 5’3 toga—£94030 [040. 80 What is the net B-C?$‘l‘2.20 What IS the BIG ratio?l- (3| ‘— Should you buy the wagon? ‘ Why or why not? tum/MU Mill-'1 30m ope/d lngk WM WWW‘W 4. You manage a vegetable packing plant that was recently renovated to include a labor-saving packing machine. The following table gives the relevant input combinations of labor and machinery that will produce a constant 150 packed units per day. (15 points) Assume costs are $20 per unit of labor and $12 per unit of machine time. Find the least cost combination of labor and machinery use. Combination :Ffi . l2- CBL— 5 LEE-4:”; AM PL. 20 What combination would be the least cost if both the labor and machine costs doubled? Explain your answer. H’WW Mbtfizibfiwwu 2117' r"— :h‘ (0 ‘tb 5. Suppose that you have the management ability and equipment necessary to grow the following crops. The resource requirements and gross margin per acre for each crop is listed in the table below. (25) ---- available ------ return ---- Acres Water 1 3 a 165 ac ft. Labor ‘""'"“3~ ‘ 350 hrs. n i-- ’5 ($00 I‘t.?‘t8‘t0 8874 234932.70 Following the steps for‘ simplified program”, which crop will enter your farm plan first? Crop: B/UBCCQQL/ ‘ What limits your production of this crop? WM 6. Explain the benefits of a Whole Farm Budget to a farm ma‘i’iagér. (5) ...
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