Question

Suppose you create an enterprise budget for corn and assume the output price per bushel is $2.25 and the yield is 180 bushels per acre. The total operating expenses are $250 and the total fixed costs are $145. What is the net profit per acre?

Answer 1

To determine the net profit per acre for a corn enterprise budget with an output price of $2.25 per bushel and a yield of 180 bushels per acre, calculate total revenue by multiplying these two figures, then subtract total operating and fixed costs to find a net profit of $10 per acre.

Step-by-step explanation:

To calculate the net profit per acre for corn with the given parameters, you multiply the output price per bushel by the yield to find total revenue. Then, subtract the total operating expenses and the total fixed costs from this value. Here's the calculation:

• Total Revenue = $2.25 per bushel * 180 bushels per acre = $405 per acre
• Total Costs = $250 (operating expenses) + $145 (fixed costs) = $395 per acre
• Net Profit = Total Revenue - Total Costs = $405 - $395 = $10 per acre

Therefore, the corn enterprise budget results in a net profit of $10 per acre.

To calculate the net profit per acre, we need to subtract the total operating expenses and the total fixed costs from the total revenue. The total revenue can be calculated by multiplying the output price per bushel by the yield per acre. In this case, the total revenue is $2.25 x 180 = $405. The net profit per acre is the total revenue minus the total operating expenses and the total fixed costs, which is $405 - $250 - $145 = $10.