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Jake Eagles is trying to budget the cost of seeding his farm. He anticipates that there will only be four types of input costs -- seed, fertilizer, herbicides and fuel. He has 600 acres of land, half of which will be seeded and the other half will be summerfallowed. All of the land being seeded will be in wheat. Students are to research the cost of seed, fertilizer, herbicide, and fuel to fill in the blanks below.
Seed
Seed is applied at the rate of 15 kg per acre. Registered seed has been selling for $_____ per kg.
Fertilizer
The latest price on fertilizer is $_____ per tonne. Fertilizer of this type is applied at the rate of 0.04 tonnes per acre (40 kg per acre).
Herbicide
Jake will use the latest all-round herbicide called Laser on the wheat with no chemical on summerfallow. Laser has been selling for $_____ per 4 litre jug. One jug will cover 20 acres at recommended rates.
Fuel
Diesel fuel is currently selling for $_____ per litre. Seeding requires about 8 litres for each acre.
Actual Costs
There has been a 10% increase in costs. Increase the researched costs above to fill in the actual costs below.
Jake purchased and used 4 tonnes (4,000 kg) of wheat seed. He paid $_____ per kg for the seed.
The local cooperative charged Jake $_____ per tonne for fertilizer. He purchased and used 12 tonnes.
Twelve jugs of Laser were used. The chemical was purchased for $_____ per jug.
Jake's equipment consumed 2,500 litres of diesel fuel. The fuel was purchased for $_____ per litre.
Solution:
Jake Eagles Budgeted Seeding Costs
For the year ended December 31, year
Acres to be seeded 300 Crop Wheat
Seed:
|
15 kg/acre x 300 acres x $______/kg |
= $______________ |
Fertilizer:
|
.04 tonnes/acre x 300 acres x $__________/tonne |
= $______________ |
Herbicide:
|
($___________/container x 300 acres)/20 acres/container |
= $______________ |
Fuel
|
8 l/acre x 300 acres x $__________/l |
= $______________ |
| Total budgeted input costs |
= $______________ |
Jake Eagles Actual Seeding Costs
For the year ended December 31, year
Acres to be seeded 300 Crop Wheat
Seed:
| 13.33 kg/acre x 300 acres x $___________/kg |
= $______________ |
Fertilizer:
| 0.04 tonnes/acre x 300 acres x $__________/tonne |
= $______________ |
Herbicide:
| ($____________/container x 300 acres)/25 acres/container |
= $______________ |
Fuel:
| 8.33 l/acre x 300 acres x $__________/l |
= $______________ |
| Total actual input costs |
= $______________ |
Jake Eagles Seeding Costs
For the year ended December 31, year
Acres to be seeded ______________________________ Crop__________________________________
Seed:
| __________ kg/acre x acres x $ /kg |
= $______________ |
Fertilizer:
| ____________ tonnes/acre x acres x $ /tonne |
= $______________ |
Herbicide:
| ($ /container x acres)/ /acres/container |
= $______________ |
Fuel:
| __________l/acre x acres x $ /l |
= $______________ |
| Total input costs |
= $______________ |
Jake Eagles
Variance Analysis - Seeding Costs
For the year ended December 31, year
| Input |
Budgeted Cost |
Actual Cost |
Variance |
Possible Cause(s) |
| Seed |
Seeded lighter than planned - purchased seed for more than planned. |
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| Fertilizer |
Paid $50.00/tonne more than expected. |
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| Herbicide |
Applied at rate lighter than planned. |
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| Fuel |
Fuel consumption more than planned but cost was less than planned. |
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| Total |
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