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Sbt2353:Farm Management Question Paper
Sbt2353:Farm Management
Course:Bachelor Of Crop Protection
Institution: Meru University Of Science And Technology question papers
Exam Year:2013
QUESTION ONE – 30 MARKS
(a) State and explain the limitation of a linear programming problem. (6Marks) (b) Explain the importance of keeping farm records. (6Marks) (c) RX farm bought a plough at sh. 650,000. Calculate the book value of the plough per annum if the salvage life is 5 years and a scrap value of 50,000. Use the sum of year’s digit method. (6Marks) (d) Explain the reasons of preparing a cash flow budget. (6Marks) (e) A farmer has been growing barley and is wondering whether to replace the crop with wheat. The fixed costs would increase by sh. 5,000. The average yield of Barley is 30 bags/Ha and the selling price of Barley is sh. 4,000/bag. The variable cost of Barley is 12,000/Ha. What has wheat yield to be if the price of wheat is sh. 1500/bag and the variable cost of wheat is sh. 10,000 for wheat to break even barley. (6Marks)
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QUESTION TWO – 20 MARKS
(a) The following information relates to the books of Mwema Farm as at 31/6/2013
Enterprise/Cost/Revenue Corn Enterprise Vegetable Enterprise Fixed costs 5,000 7,000 Variable Cost Labour Fertilizer Fuel Storage Carriage Marketing 2,000 3,000 1,000 6,000 300 2,000 3,000 4,000 5,000 4,000 - 3,000 Revenue Sales 20bags @ 6,000 30 bags @ sh. 5,000
Required: Prepare a partial budget. (10Marks)
(b) In the books of Real Farm as at 31/12/2000 Description Amount Description Amount Tractor 200,000 Profit 31/12/2000 25,000 Land 300,000 Capital ? Machinery 100,000 Bank Loan 40,000 Furniture 50,000 A.F.C Loan 60,000 Cash Crop 400,000 Bills Payables 10,000 Harvest in store 500,000 Bills receivables 5,000 Expenses: Labour 20,000 Buildings 80,000 Fuel 30,000 Borehole 70,000 Others 10,000
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Required:
(i) Calculate the owners Equity. (3Marks) (ii) Prepare a Balance Sheet. (7Marks)
QUESTION THREE – 20 MARKS
(a) The Farm Manager of the P.K. Farm has the following forecast on the cash inflows and cash outflows for the first quarter of 2012. Prepare a cash flow analysis. (10Marks
Month Credit Sales Cash Sales Wages Fixed Costs Other Costs January 30,000 40,000 7,000 6,000 3,000 February 20,000 45,000 8,000 4,000 7,000 March 20,000 40,000 6,000 5,000 1,000 April 30,000 30,000 4,000 3,000 3,000
Note:
(i) There was no cash balance or credit balances from the previous years. (ii) Receipts from credit sales as follows. 30% the same month 50% the following month and the balance the next month. (b) Explain why a Trial Balance may not balance. (10Marks)
QUESTION FOUR – 20MARKS
(a) A farm produces three products A, B and C. The products yield a contribution of $8, $5, $10 respectively. The products use a machine which has 400 hours capacity every season. Each unit of the product uses 2,3 and 1 hour respectively of the machine’s hours capacity. 200 hrs of special labour is available each season. Product A uses 2hours per unit and produc C 4 Hours per unit. There are only 150 units available in the period of a special component which is used singly in A and C. There is an agreement with a buyer not to supply more than 50 units of B in the period.
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Required: (i) State the objective function. (3Marks) (ii) Express the constraints functions. (4Marks) (iii) Find the production plan which maximizes the contribution. (8Marks) (b) Explain the business accounting cycle. (5Marks)
QUESTION FIVE – 20 MARKS
(a) Explain the various methods of calculating depreciation. (14Marks) (b) Explain the following terms. (6Marks) (i) Assets (ii) Liabilities (iii) Capital (iv) Book Keeping Equation (v) Cash Flow Statement (vi) Contra entry
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