Enterprise Budgets
Provides an estimate of the potential revenue, expenses, and profit for a single enterprise
What is Enterprise Budget
What is Whole-Farm Plan
The objective for a 1 year plan
What is maximize total gross margin for the farm
Should be used to analyze changes involving interactions between several enterprises
What is partial budget
Whenever opportunity costs are included on a partial budget, the result is the estimated change in
What is Economic Profit
Costs that are hardest to estimate
What is Fixed Cost
A whole farm budget can be used to determine
Resource that is generally the most valuable but most difficult to alter
What is Land
Net change in profit is found by
What is subtracting right - left
Two types of dual values
What is shadow prices and reduced costs
Primary purpose of enterprise budgets
What is estimate projected costs, returns, and profit per unit
Determined in terms of crop yields, livestock production rates, costs of production, net income
What is Performance Goals
This shows which new crop and livestock enterprises are feasible
What is Resource Inventory
Consists of doing the budget computations several times, each with a different set of prices or yields
What is Sensitivity Analysis
A good estimate of the gross margin for an enterprise requires the manager's best estimates of gross revenue and variable costs.
What is True
Describes the average cost of producing one unit of a commodity
What is Cost of Production
When major changes in supply, land, and labor occur you should use this type of budget
What is long run budgets
Mathematical technique that can be used to find the optimal combination of enterprises within the resource limits of the farm
4 Categories of Partial Budget Format
What is additional costs, reduced revenue, additional revenue, reduced costs
Cost of production = total cost/expected yield
What is False
These decisions must be made before beginning work on the enterprise budget
What is agronomic, production, and technical decisions
When prices, cost, and other factors are expected to stay the same over the next production year, is what form of budget
What is short run budgets
The six steps to the Procedure for developing a whole-farm plan
What is determine goals, inventory available resources, identify possible enterprises and technical coefficients, estimate gross margins per unit, best combination of enterprises, prepare whole farm budget.
Changes in costs and revenues needed for partial budget can be identified by considering four questions. Name at least 2
What new additional costs will be incurred? What current costs will be reduced or eliminated? What new or additional revenue will be received? What current revenue will be lost or reduced?
Enterprise budgets are the building blocks of
What is a whole farm budget and plan