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Grosbeck Cattle Company has gathered the following information about operations for the past year.

	Year 1
Cow herd size	120
Revenues from sale of calves	$108,000
Feed	18,200
Labor (1 cowboy per 120 cows)	24,000
Cow depreciation	15,300
Bull depreciation (1 bull per 30 cows)	1,698
Medications/vaccinations	3,120
Land lease	11,000
Operating income	30,633

(a) Determine the "per unit" cost table on the preprinted worksheet.

(b) How much is the per-cow contribution margin?

(d) Assuming Mathew's land will support a herd of 360 cows, project anticipated profits. Why is the

profit more than twice as much as the amount that is earned on a herd size of 120 cows?

	A.	7(a) Feed variable costs $154 7(a) Cow depreciation variable costs $129 7(a) Medications vaccinations variable costs $28 7(a) Land Lease fixed costs $91.90 7(a) Labor fixed costs (1 cowboy per 120 cows) $221.00 7 (a) Bull depreciation fixed costs (1 bull per 30 cows) $16.15 7(b) Contribution margin per cow $598 7(d) Operating income $126,446
	B.	7(a) Feed variable costs $150 7(a) Cow depreciation variable costs $122 7(a) Medications vaccinations variable costs $23 7(a) Land Lease fixed costs $90.67 7(a) Labor fixed costs (1 cowboy per 120 cows) $180.00 7 (a) Bull depreciation fixed costs (1 bull per 30 cows) $12.15 7(b) Contribution margin per cow $545 7(d) Operating income $123,046
	C.	7(a) Feed variable costs $146 7(a) Cow depreciation variable costs $123 7(a) Medications vaccinations variable costs $16 7(a) Land Lease fixed costs $87.67 7(a) Labor fixed costs (1 cowboy per 120 cows) $180.00 7 (a) Bull depreciation fixed costs (1 bull per 30 cows) $12.15 7(b) Contribution margin per cow $425 7(d) Operating income $126,046
	D.	7(a) Feed variable costs $146 7(a) Cow depreciation variable costs $108 7(a) Medications vaccinations variable costs $36 7(a) Land Lease fixed costs $95.67 7(a) Labor fixed costs (1 cowboy per 120 cows) $250.00 7 (a) Bull depreciation fixed costs (1 bull per 30 cows) $14.15 7(b) Contribution margin per cow $595 7(d) Operating income $126,046
	E.	7(a) Feed variable costs $152 7(a) Cow depreciation variable costs $128 7(a) Medications vaccinations variable costs $26 7(a) Land Lease fixed costs $91.67 7(a) Labor fixed costs (1 cowboy per 120 cows) $200.00 7 (a) Bull depreciation fixed costs (1 bull per 30 cows) $14.15 7(b) Contribution margin per cow $595 7(d) Operating income $126,046

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