To plant and harvest 20,000 bushels of corn,Farmer Jayne incurs fixed and variable costs totaling $33,000.The current spot price of corn is $1.80 per bushel.What is the profit or loss if the spot price is $1.90 per bushel when she harvests and sells her corn?

Question

Quizplus · Accepted Answer

To calculate the profit or loss, we need to first calculate the total revenue and total cost.

Total revenue = 20,000 x $1.90 = $38,000
Total cost = $33,000 (given)

Profit/Loss = Total revenue - Total cost
             = $38,000 - $33,000
             = $5,000 gain

Therefore, the best choice is C, which represents a $5,000 gain.

To Plant and Harvest 20,000 Bushels of Corn,Farmer Jayne Incurs