Enterprise Budgets Quiz

What is the definition of an Enterprise budget?

• An estimate of the cost for the entire farm operation

• An estimate of the cost, returns, and profit for a single activity on a farm

• An estimate of the cost for a livestock operation on a farm

• An estimate of the cost for a single crop on a farm

Why is it important to create an Enterprise budget?

• To maximize profits across the entire farm

• To determine the cost of purchasing farm equipment

• To determine the cost of running the entire farm operation

• To determine the cost of running a single activity on a farm

Who is best suited to develop a budget for an Enterprise?

• An expert with a degree in agribusiness

• The individual who is going to run the Enterprise

• A computer programmer

• A financial analyst

What is the purpose of intermediate calculations in an Enterprise budget?

• To calculate the total revenue of the Enterprise

• To calculate the total variable costs of the Enterprise

• To provide a target for the profitability of the Enterprise

• To provide a breakdown of the fixed costs of the Enterprise

What is the cost of Free Labor in an Enterprise budget?

• The cost of training new farm workers

• The cost of purchasing labor-saving equipment

• The cost of hiring labor from outside the farm

• The cost of labor paid to family members working on the farm

What is the cost of capital in an Enterprise budget?

• The cost of using the owner's own funds for the Enterprise

• The cost of borrowing money for the Enterprise

• The cost of investing in new technology for the Enterprise

• The cost of purchasing land for the Enterprise

What is the purpose of including a cost of capital in the budget?

• To calculate the total variable costs of the Enterprise

• To account for the opportunity cost of using the owner's funds

• To calculate the total revenue of the Enterprise

• To provide a target for the profitability of the Enterprise

What is the unit of measure commonly used in row crop budgets?

• Per bushel

• Per pound

• Per acre

• Per animal

What is the category of costs associated with owning the land for an Enterprise?

• Variable cost

• Direct cost

• Fixed cost

• Production cost

What is the purpose of a gross margin in an Enterprise budget?

• To provide a breakdown of the fixed costs of the Enterprise

• To provide a target for the profitability of the Enterprise

• To calculate the total variable costs of the Enterprise

• To calculate the total revenue of the Enterprise