Today’s cash price for corn is $3.00/bu. You can store your corn for 4 months at
ID: 1109020 • Letter: T
Question
Today’s cash price for corn is $3.00/bu. You can store your corn for 4 months at a cost of 10¢/bu. per month. What selling price in $/bu. do you need to have 4 months later to break even considering the storage costs?
$2.90/bu
$3.10/bu
$3.30/bu
$3.40/bu
None of the above
2. Assume that a warehouse is hired for 150 days of the year at a total cost of $900 and that the weighted average contents are 300 bags of potatoes. Calculate the storage cost of per bag per day for potatoes.
a. $0.02/bag/day
b. $3/bag/day
c. $6/bag/day
d. $18/bag/day
e. None of the above
3. Assume that there are 40 m3 available in the truck to be used and that it costs $800 to hire the truck. A container of 0.2 m3 holds 8 lbs. of tomatoes and a container of 0.4 m3 holds 10 lbs. of green peppers. Find the transport cost for tomatoes and green peppers per container per lb.
a. $0.4/lb. for tomatoes and $0.8/lb. for green peppers
b. $0.5/lb. for tomatoes and $0.8/lb. for green peppers
c. $0.5/lb. for tomatoes and $0.7/lb. for green peppers
d. $0.4/lb. for tomatoes and $0.7/lb. for green peppers
e. None of the above
4. Assume that oranges are packed 25 lbs. at a time in wooden boxes which, with occasional repairs, can be used for 10 trips. A box costs $15, repairs and cleaning during its life costs $3 and each time the box is transported back empty to the producing area costs $2. What is the packaging cost per trip per lb.?
a. $0.140 per trip per lb.
b. $0.152 per trip per lb.
c. $0.680 per trip per lb.
d. $0.800 per trip per lb.
e. None of the above
5. Assume that there is a 5 percent loss in 1 lb. of tomatoes purchased by the trader from the farmer. The trader buys tomatoes from the farmer at $4 per lb. and marketing costs are $2.5 per lb. for the tomatoes originally purchased. The selling price of tomatoes is $7 per lb. Calculate the margin per lb. to the trader after the product loss.
$0.05 per lb.
$0.10 per lb.
$0.15 per lb.
$0.20 per lb.
e.None of the above
Explanation / Answer
Storage cost / purchase cost
=10/3 =3.33/ bu
(2) (A)
the storage cost is:-
$900 / 150 days = $6.00 per day
$6 / 300 bags = $0.02 per bag/day
(3) (B) $0.5/lb. for tomatoes and $0.8/lb. for green peppers
the transport cost for tomatoes and green peppers
$800 / (40 m3 / 0.2 m3) = $4.00 per container
and $4.00 / 8 lb = $0.5 per lb
for green peppers
$ 800 / (40 m3 / 0.4 m3) = $8.00 per container
and $8.00 / 10 lb = $0.8 per lb
(4) (b) $0.152 per trip per lb
packaging cost per trip per lb=
(original cost + repairs) / no. of trips] transported back empty to the producing area costs
($15 +$3 ) / 10 trips + $2
=18/10 + 2
= $3.80 per 25 lbs
Now
$3.80 / 25 lbs = $0.152 per lbs
(5) ( C ) $0.15 per lb.
Cost of 1 lbs= 4 per lbs
Packaging cost 2.5 per lbs
Total cost = 4+2.5= 6.5
Loss in 1 lbs = 5% remaining lbs = 1-5% =.95
Revenue = 7* .95 = $ 6.65
Margin = 6.65-6.5 = $ 0.15 per lb
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