Assignment 8 Enterprise Budget

xlsx

School

Northern Arizona University *

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Course

305

Subject

Finance

Date

Jan 9, 2024

Type

xlsx

Pages

Uploaded by aliyahdutemple

Lab Assignment 9 - Enterprise Budget -- Grain yields are measured in cwt or hundred weights -- Grain yields per acre for pinto beans are 85% of sunflower grain yields. Hull yield is 10 cwt per acre. -- Grain prices per cwt are 30% higher for pinto beans than they are for sunflowers. The price of bean hulls is $1.45 per cwt. -- Seed costs per acre for pinto beans are 25% higher than for sunflower -- The cost per acre for input expenses and irrigation costs for pinto beans are identical to sunflowers irresepctive of yield -- Custom harvest costs for pinto beans are triple the cost for sunflowers -- All other variable and fixed costs for pinto beans are identical to sunflower Enterprise Budget Enterprise Budget Sunflower Pinto Bean Sunny Grain Farms Sunny Grain Farms Sunflower ($/acre) Unit Quantity Price Amount Pinto Bean ($/acre) Unit Quantity Price Amount Revenue Revenue Grain Yield cwt 60 $7.50 $450.00 Grain Yield cwt 51 $9.75 $497.25 Hull Yield cwt 10 $1.45 $14.50 Total Revenue $450.00 Total Revenue $511.75 Variable Costs Variable Costs Seed costs acre 1 $28.26 $28.26 Seed costs acre 1 $35.32 $35.32 Input expenses cwt 40 $0.75 $30.00 Input expenses cwt 36 $0.75 $27.00 Irrigation costs cwt 40 $1.40 $56.00 Irrigation costs cwt 36 $0.75 $27.00 Custom harvest costs acre 1 $8.00 $8.00 Custom harvest costs acre 1 $8.00 $8.00 Labor acre 1 $2.30 $2.30 Labor acre 1 $2.30 $2.30 Fuel acre 1 $1.77 $1.77 Fuel acre 1 $1.77 $1.77 Machinery repairs & maintenance acre 1 $2.94 $2.94 Machinery Repairs & Maintenance acre 1 $2.94 $2.94 Interest on operating capital $ $ 85 5% $135.73 Interest on Operating Capital $ $77.00 5% $109.55 Total $265.00 Total $213.88 Income Above Variable Costs $185.00 $/acre Income Above Variable Costs $297.87 $/acre Fixed Costs Fixed Costs Crop insurance acre 1 $7.37 $7.37 Crop insurance acre 1 $7.37 $7.37 Crop consultant acre 1 $6.00 $6.00 Crop consultant acre 1 $6.00 $6.00 Machinery ownership Expenses acre 1 $12.58 $12.58 Machinery ownership Expenses acre 1 $12.58 $12.58 Overhead acre 1 $4.25 $4.25 Overhead acre 1 $4.25 $4.25 Farm Real Estate taxes acre 1 $10.00 $10.00 Farm Real Estate taxes acre 1 $10.00 $10.00 Land acre 1 $120.00 $120.00 Land acre 1 $120.00 $120.00 Total Fixed Costs $160.20 Total Fixed Costs $160.20 Profit (Return to management and risk) $104.80 $/acre Profit (Return to management and risk) $53.68 $/acre Simple Breakeven Sunflower Price = $5.75 $/cwt Simple Breakeven Pinto Grain Price = $8.98 $/cwt (assume hull revenue remains unchanged) Simple Breakeven Sunflower Yield = 1.7 cwt/acre Simple Breakeven Pinto Grain Yield = 1.1 cwt/acre (assume hull revenue remains unchanged) Simple Breakeven Revenue = $46 $/acre Simple Breakeven Revenue = $47 $/acre Comparative Breakeven Sunflower Price = $3.23 $/cwt Comparative Breakeven Sunflower Yield = 0.6 cwt/acre The goal of this assignment is to construct two enterprise budgets for Sunny Grains farms, one for sunflowers and one for pinto beans, and calculate breakeven prices and yields. You can address the memo to Sunny Grain farms. Make sure to interpret the results in the memo. Step 1 - Complete the enterprise budget spreadsheet model for sunflowers by entering the correct formulas in the cells highlighted in yellow -- Include 6 months of interest on the sum of operating expenses Step 2 - Complete the enterprise budget spreadsheet model for pinto beans based on the following information: Step 3 - Calculate simple and comparative breakeven values for sunflower price and sunflower yield in the space provided Step 4 - Submit the Excel spreadsheet model you developed to Canvas before the due date (there are no written responses required, only the completed Excel spreadsheet model)

There are no written responses due for Lab Assignment 8, only the written memo. The memo should report the results of the enterprise budget construction activity back to Sunny Grain farms.

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