Farm and Agribusiness Management
According to Joey Martin's Balance Sheet, was the change in the Total Net worth from Dec 31, 2015 to Dec 31, 2016
$1,308
According to Joey Martin's Profit/Loss Statements, the value of closing inventory in 2015 was ________
$15,310
At 200 units of output, total cost is $36,000 and total variable cost is $20,000. What does total fixed cost equal at 200 units
$16,000
Refer to Exhibit 2. you are a wheat farmer who plans to harvest and sell wheat in July. You decide to hedge all of your wheat by selling wheat futures contracts on January 10, 2004. You expect the basic in July to be -$0.10. Come July 10, you offset your future position and sell in your local super market. What is your realized hedge price?
$2.35
refer to Exhibit 2. You are a wheat farmer who plans to harvest and sell wheat in July. You decide to hedge all of your wheat by selling wheat futures contracts on January 10, 2004. You expect the basis in July to be a -$0.10. What is your expected hedge price on January 10?
$3.20
refer to Exhibit 2. You purchase a put option for a July 2004 winter wheat futures contract at a price (the option premium) of $0.40 per bushel. The strike price for this option is $4.00 per bushel. If the expected basis in July is $0.25/bushel, what is minimum expected price you will receive for your wheat by using this option?
$3.85
According to Joey Martin's Profit/ Loss statement, the what is the differencing Total Operating expense from 2015 to 2016
$470
According to Joey Martin's balance sheet, what was the value of his depreciable breeding animals on December 31, 2015
$8,360
Refer to Exhibit 1. If a free market were allowed in the kidney market, the equilibrium price would be P2. The number of kidneys transplants would increase by _____ compared to the number transplanted at P=$0
(Q2-Q1)
The formula used to calculate break-even prices to cover total operating costs is _________
(price time yield) minus total operating cost=0
If quantity demanded rise by 90 percent as price falls by 40 percent, the coefficient of price elasticity of demand equals
2.25
According to Joey Martin's balance sheet, what year did he take a deduction for products used at home, when he processed a steer to use for personal food
2015
According too Joey Martin's Balance sheet, what is the current ratio for his project on Dec 31, 2016
3.0160
On a certain farm alfalfa yields have been 4.3, 7.2, 5.6, 3.6, 6.7, 7.2, 5.5, 5.7, 4.8, and 5.4 tons per acre in that last 10 years. Assuming past yields are a good indicator of future yields, what is the most likely yield range for the coming year?
5 to 6 tons per acre
Which of the following will NOT shift a supply curve
A change in the good's own price
One advantage of a double -entry accrual accounting system over a single-entry cash system is _____
A current balance sheet is always available
The statement "To achieve an average feed conversion rate of 2.75 pounds pf feed per pound of grain for my market hogs by 2007" is _______
A goal
A " quota" is
A legal limit on the amount of a good that can be imported
When the futures price moves above price that the producer sold at, he/she will receive _____
A margin call
Refer to Exhibit 1. Suppose the government imposes a price ceiling at P=$0. There will be _______
A shortage of kidney equal to (Q3-Q1)
A sound estate plan needs to address which of the following items?
ALL of the above
Social Security benefits include ______
ALL of the above
What are accounting methods you use?
ALL of the above
Which of the following is an operating activity
ALL of the above
The currant ratio is a measure of a farm firm's _____
Ability to pay short-term credit obligations
At the end of the year, a farmer has an unpaid bill at the local machinery repair shop. It would be shown in an accrual accounting system is an _______
Account payable
Effective tax planning requires all but one of the following
Accurate estimates of family living expenses
Which of the following are the profit increasing changes on a partial budget?
Additional cost and reduced revenue
A cash flow budget can be used to _____
All of the above
A projected negative cash balance at the end of the year can be made positive by _____
All of the above
Which of the following is an operating activity
All of the above
Which of the following may be included on a partial budget?
All of the above
The legal, economic and social act of determining the allocation of a person's property to appropriate heirs is defined as ______
An estate plan
If Max's demand for hot dogs falls as his income rises, then hot dogs are
An inferior good
A balance sheet will list which of the following
Assets and Liabilities
Which financial statement covers only a single point in time rather than a period of time?
Balance Sheet
Of the following, which is the most liquid asset
Balance in checking account
Which of the following lists the four basic financial statements
Balance sheet, income statement , statements of owner equity and statements of cash flow
The difference in the futures price and the local rice is called _______
Basis
The difference the local cash market and the futures market is called the _______
Basis
One who believes prices are too high and will decline is known as _______
Bear
In the theory of perfect competition,
Buyers and sellers of the product know everything that there is to know about the product
A farm business accounting period for January 1, 2011 to December 3, 2011 would be an example of what type of accounting period
Calendar year accounting period
According to Joey Martin's Profit/Loss Statement, where would the value for replacement heifers that were raised and kept be accounted for?
Capital Deprecation
The accounting method used by most farmers for income tax is ________
Cash
When then producer is satisfied with the price of his/her soybeans, he/she could ____
Cash Contract
Which of the following items would be a farm business expense for an accounting period
Cash used to purchase livestock feed
Which of the following items would NOT be a farm business expense for the accounting period?
Cash used to purchase new machinery
Which of the following items on a balance sheet would NOT be considered when making accrual adjustments to net income?
Change in market value of land
External scanning could include assessing ________
Changes in consumer tastes
A cash flow budget can be used to monitor the farm business by ____
Comparing actual cash inflows and outflows to the budget monthly cash flows
Estimate the total amount of operating credit that will be owed at the end of each time period during the year useful f0r ________
Comparing to the maximum balance on an operating line that a lender will approve
The rate that was negotiated between borrower and lender at the beginning of the loan process is known as ______
Contract Rate
An addition to revenue, net worth or any other account is known as _______
Credit
Deprecation is a cost associated with which of the following assets
Dairy Barn
The relationship between quantity purchased and price is known as ______
Demand
Which of the following terms describes this situation: Quantity taken will increase only if the price comes down
Demand
A method of prorating the cost of a capital asset over its useful life is ________
Depreciation
The cost of machinery, equipment and farm buildings can be deducted each year over their expected life. this is called _______
Depreciation
Which of the following is an example of a strategic decision?
Determining what type of business/legal organization to use
Two similar firms could have the same return to management but different net farm income due to ________
Differences in amount of unpaid labor and equity capital contributed
Selling through a farmers' market or roadside market is known as
Direct Marketing
Input or resource substitution is _________
Directing
Which of the following farm business analysis measures is NOT a measure of efficiency (either physical or economic)?
Dollars received per ton of hay sold
the deprecation method with the greatest deprecation in the first year is _______
Doubling declining balance
What are the steps in the control function of farm management
Establish standards for comparing results; measure the actual performance of the farm business; identify problem areas and take corrective action
A cost that is incurred when an actual monetary payment is made is a(n) __________ cost
Explicit
An increase in the number of non-farmers living in rural areas will cause ______
Farmers to pay more attention to off-farm effects of their production practices
According to Joey Martin's Profit/Loss Statement, what was the biggest expanse category for 2016?
Feed Purchases
Which type of forward pricing tool cannot be reversed or offset later?
Forward contract with local elevator
The most common way farmers do forward pricing is through _______
Future contracts
Which of the following items will NOT be included in the estate of a business owner
Gifts made more than five years before the date of death
Which of the following is a measure of economic efficiency?
Gross revenue per year of labor
A financially secure farmer or rancher who is NOT very concerned about avoiding risk, when facing an event with an unpredictable outcome, will choose the strategy that _______
Has the highest expected value for its possible outcomes
One who sells futures contracts to protect a producer from price fluctuations is known as _________
Hedger
A trend analysis for a farm business could be performed using what kind of data for comparison?
Historical data from the same farm for the past five years
If the government imposes a tax suppliers , the equilibrium price of the product will _____ and the equilibrium quantity of the product will _____
Increase; decrease
The best description of a business which has increased its debt/ assets ratio is one which has ______
Increased its debt relative to total assets
If the debt/asset ratio is increasing, then the debt/equity ratio will be
Increasing
On a chart, a line that connects all the high points as the markets move higher forms a trend line. When projected out, it forms points of
Interest
Accrued interests is _____
Interest owned but not yet payed
Developing an accrual adjusted income statement requires_________________
Inventory records, cash revenue, cash expenses and depreciation
Which of the following CANNOT be valued using less accumulated deprecation method?
Land
Liability insurance is used to protect against ________
Legal action
proper income tax management should result in ________
Level income form year to year
which of the following is NOT a source of owner equity for a farm business?
Loans received to purchase land
One force that has helped cause U.S. farms to become larger and fewer is _______
Lower production costs per unit by spreading fixed investment in technology over more units
Which of the following tasks is NOT included in human resources management?
Lowering labor costs by lowering cash wages
Agricultural processors will probably want more uniform products in the future in order to ______
Make more efficient use of processing and packaging equipment
Limited partners are NOT allowed to participate in which of the following?
Management of the business
A firm in monopolistic competition maximizes profits by producing the quantity where_________
Marginal revenue equal marginal cost
Which of the following is a business function?
Marketing
The main objective of income tax management is to ____
Maximize after-tax income
To be depreciable, an asset must have a useful life of _____.
More than one year
One disadvantage of a corporation is that there is the potential for "double taxation." Which of the following is a double taxed in a corporation?
Net Income
The net worth statement or balance sheet reveals ____
Net worth by subtracting total liabilities from total assets
At a price of $15, Marta buys 3 CD's per month. When the price increases to %20, Marta buys 2 CD's per month. Luz says that Marta demand for CD's has decreased, IS Luz correct
No, Luz is incorrect. Marta's quantity demanded has decreased, but her demanded has stayed the same
If prices rises and total revenue falls,
None of the above
Using $20,000 in cash and a new loan of $80,000 to purchase land for $100,000 will cause equity to
Not change
A monopoly may exist because
One firm has the exclusive ownership of a secure resource
Most farmers are more likely to accept a risk if:
Only a small possible loss is involved
A depreciable asset's book value will equal its salvage value _______
Only at the end of its useful life
Selling grain from storage would be which type(s) of farm business activity?
Operation
A concentration ratio indicates the
Percentage of total sales accounted for by the four larger firms
Which of the following shows the proper sequence of management functions as they would be applied to a specific problem
Planning, implementation, control
When something is purchased and paid for in a year before it will be used to produce income it is called a ______
Prepaid expanse
A partial budget is designed to analyze the effect of a proposed management change on ______
Profit
On a partial budget which analyzes switching 120 acers from growing wheat to growing barley, which of the following costs would NOT be included on the budget?
Property tax on the land
Crop Revenue Insurance
Protects against declines in price or yield
A farmer who is willing to pay a set amount to establish floor or base price to be received would do what
Purchase a put option
To protect the price to be received for corn or soybeans being sold, the producer could ________
Purchase a put option
A producer who wants to protect his/ her price with options would purchase a ___________
Put
The Farm Financial System Council (FFSC) ________
Recommends uniform procedures and standards for preparing farm financial statements
Incorporating, paying down debt and liability insurance provides a means to______
Reduce risk
A sole-proprietor farmer pays self-employment tax on income generated by which of the following?
Sale of raised beef calves
Price movement across months within the year is ________ variability
Seasonal
Which of the following strategies does NOT reduce production risk?
Selling grain before harvest by a forward contract
Which phase of the strategic management process would be most influenced by a farm family's basic values and attitudes about agriculture
Setting Goals
In a market with a dominant firm and a competitive fringe, the dominant firm's demand curve shows the _________ that will occur in the competitive market at each price______ the equilibrium
Shortage; below
It is important when using futures contracts that you close out both the cash and futures position
Simultaneously
what is the most common form of ownership for most farmers and ranchers?
Sole proprietors
The degree to which a farm's assets adequately cover or exceed its liabilities is referred to as
Solvency
When using options, the futures price you want to fix is _______
Strike Price
the price at which a producer buys or sells an option is the ______
Strike price
An unrecoverable cost that should be disregarded in any current or future decision is also called a(n) __________ cost.
Sunk
What does stage two in production function graph determine
The amount of variable input to use
The "cost" value of farmland can change due to _____
The cost of nondepreciable improvements made, such as terraces and earthen dams
What is stage 2 of the production function
The decision making stage
The face value of a bond is _____
The dollar amount of the bond's final payment at maturity
What is the Law of Supply
The higher the price, the higher the quantity supplied will be
When the value of livestock production per $100 feed fed is greater than 100 it means that _______
The livestock enterprise had a negative profit
A "limited" partnership is one in which _______
The maximum number of acres farmed is fixed by law
Return on investments is
The net profit or net loss realized from an investment or assets
The price of eggs will drop when
The number of egg farms increase
In a farm partnership, net income is shared in proportion to _________
The ownership shares of each partner
In a joint operating agreement, gross income is shared in proportion to each person's contribution to _____
Total Cost
Someone who is neither invited nor desired in your place of business is a(n) ___
Trespasser
Where the probability of an event occurring cannot be empirically determined is known as ___________
Uncertainty
Strategies to reduce taxable income are ______
Use deferred sales contracts
The number of shares of stocks received by each stockholder when a farm corporation is formed is based on the _____ contributed by each stockholder.
Value of equity
According to Joey Martin's Profit/Loss Statement, where would the value for the steer raised and processed to eat be accounted for?
Value used at home
The point where Marginal Costs= Marginal Revenue is
Where profits are at a maximum
Elements of the past several agriculture government programs have tried to reduce the influence that the program would have on
World Market
an enterprise budget is
a statement of projected costs and returns associated with one production process, usually for one production period
What does marginal cost measure?
change in total cost to produce another unit of output
which of the following is an example of a non-current asset from Joey Martin's project
commercial cow purchase
The production of several special soybean varieties is an example of what type of risk management strategy?
diversification
Current farm assets are typically valued at
market value
Another name for a balance sheet is ______
net worth statement