. Assume that a rice milling operation converts paddy (rice as a growing crop or

Question

. Assume that a rice milling operation converts paddy (rice as a growing crop or when harvested but not yet milled) at the rate of 70 percent (0.7) and has saleable by-products equal to 25 percent of the paddy weight. Processing costs per lb. of paddy have been calculated at $0.20 per lb. on the basis of the mills total annual costs divided by the number of lbs. of paddy processed. The buying price of the paddy was $1.70 per lb. and the by-products have a value of $0.50 per lb. Calculate the breakeven selling price per lb. of milled rice (i.e., processing cost per lb. of paddy).
a. $2.111 per lb.
b. $2.328 per lb.
c. $2.412 per lb.
d. $2.543 per lb.
e. None of the above

7. Assume an example involving a consignment of 200 lbs. of tomatoes as follows:
100 lbs. sold at $3.00/lb.
60 lbs. sold at $1.60/lb.
20 lbs. sold at $1.20/lb.
10 lbs. sold at $0.70/lb.
10 lbs. which cannot be sold
Calculate the average selling price per lb.

a. $0.635 per lb.
b. $1.655 per lb.
c. $2.015 per lb.
d. $2.100 per lb.
e. $2.135 per lb.
8. Assume the buying price of tomatoes from the farmer is $0.40 per lb., the weighted average wholesale selling price is $0.90 per lb. and the weighted average retail price is $1.12 per lb. Calculate the share to the producer, wholesale-to-farm margin, and retail-to-wholesale margin, respectively.
a. 35.7%; 44.6%; 18.6%
b. 35.7%; 43.6%; 19.6%
c. 36.7%; 44.6%; 19.6%
d. 35.7%; 44.6%; 19.6%
e. None of the above

9. Trucks can be classified as:
a. Common carriers
b. Contract carriers
c. Exempt carriers
d. Private trucking
e. All of the above

10. Ordinarily, rates per ton/mile are the highest for which of the following transport mode?
a. Barges
b. Rails
c. Trucks
d. Air
e. The rates for all of the above are the same

Explanation / Answer

Question 6

Total cost per unit = 1.7 +0.2 = 1.92 $ per lb

For each unit of raw material, output is

0.7 units of milled rice and 0.25 units of by product

Selling price of by product = 0.25*0.5 = 0.125

Remaining cost = 1.9-0.125 = 1.78 $  

For a break even, we need to sell 0.7 lb of milled rice at 1.78 $

So, we need to sell 1 lb of rice at 1.78/0.7 = 2.543 $

Option D

Question 7.

Average selling price will be calulated as weighted average of all the sales

Average selling per lb = sum of all ( units* selling price)/ total number of units =

(100* 3 + 60*1.6 + 20*1.2 + 10*0.7 + 10*0) /200 = 2.135 $ per lb

Option E

Question 8.

Retail to wholesale margin = 1.12-0.9/1.12 = 19.64 %

Wholesale for farm margin = 0.9-0.4/0.9 = 55.6&

Answer is E, None of the above

Question 9.

Common carriers - a person or company undertaking to transport any goods or passengers on regular routes at agreed rates. Majority Trucks fall under this category

Contract carriers - a transport line that carries persons or property under contract. Trucks can fall under this category. Movers and packer trucks can fall under this category

Exempt carriers - a transport agency specializing in services (such as taxi service) or commodities (such as farm products or bulk cargo) exempt from regulation by the Interstate Commerce Act. Trucks can be used by farmers to transport crops and can fall under this category

Private Trucking

Answer is Option E. All of the above

Question 9.

Ordinarily, rater per ton/mile should be highest for D. Air

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