1. Today’s cash price for corn is $3.00/bu. You can store your corn for 4 months
ID: 1115129 • Letter: 1
Question
1. 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?
a. $2.90/bu
b. $3.10/bu
c. $3.30/bu
d. $3.40/bu
e. 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.
a. $0.05 per lb.
b. $0.10 per lb.
c. $0.15 per lb.
d. $0.20 per lb.
e. None of the above
Explanation / Answer
1.Option d.
Since the storage cost increase to 0.4¢/bu for 4 months, the selling price needs to increase to $ 3.4/ bu
2.Option a.
Total cost of storage of 300 bags = $900
Per bag storage cost for 150 days = 900/300=$3
Per day storage cost = 3/150= 0.02
=(900/300)/150 = $0.02/bag/day
3.Option b. $0.5/lb. for tomatoes and $0.8/lb. for green peppers
Tomatoes
0.2m3
8lb
40m3
X
X=(8*40)/0.2
1600 lbs
Cost of container =800/1600
$0.5/lb. for tomatoes
Green Peppers
0.4m3
10lb
40m3
X
X=(10*40)/0.4
1000 lbs
Cost of container =800/1000
$0.8/lb. for tomatoes
4. Option d. $0.800 per trip per lb.
box costs
$15
cleaning costs
$3
transported back costs
$2
Total Cost
$20
per trip per lb.=20/25
$0.8
5. e. None of the above
Cost
Original Cost
4
Market Cost
2.5
Cost-Original
6.5
Product loss at 5 percent to original
0.325
Total Cost
6.825
Selling price
7
Margin=7-6.825
0.175 per lb
Tomatoes
0.2m3
8lb
40m3
X
X=(8*40)/0.2
1600 lbs
Cost of container =800/1600
$0.5/lb. for tomatoes
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