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What will your average fixed cost per acre

by | Dec 1, 2023 | Posted Questions

. Assume you have just purchased a new combine. You calculate the total fixed cost to be $22,500 per year and estimate a total variable cost of $9.50/acre.

a. What will your average fixed cost per acre be if you combine 1,200 acres per year? What about 900 acres per year?

b. What is the additional cost of combining an additional acre?

c. Assume you plan to use the combine only for custom work on 1,000 acres per year. How much should you charge per acre to be sure all costs are covered? What if you custom harvest 1,500 acres per year?

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