Question 1

A partial budget analyzes only two management alternatives at one time.

True

False

Question 2

AFC is constant as output increases

True

False

Question 3

Labor can be either a cash expense or an opportunity cost.

True

False

Question 4

A cash flow budget for a whole farm can be prepared on an annual, quarterly or monthly basis.

True

False

Question 5

A cash flow budget can be used to analyze the feasibility of a new capital investment.

True

False

Question 6

Only cash revenues are included on an enterprise budget.

True

False

Question 7

The values in a crop enterprise budget are normally for

a.	one unit of output

b.	100 pounds of output

c.	one bushel of output

d.

one acre

Question 8

On an enterprise budget, fixed costs are often called

a. direct costs

b.	operating costs

c.	prepaid costs

d.	ownership costs

Question 9

The combination of feed ingredients in a least-cost feed ration depends on all the following except:

a.	relative prices of the ingredients available

b.	substitution rates between the ingredients available

c.	selling price of the livestock

d.	the nutritional requirements of the livestock

Question 10

Which of the following may be included on a partial budget?

a.	fixed costs

b.	variable costs

c.	opportunity costs

d.	all of the above

Question 11

A partial budget would be the most useful type of budget for estimating

a. the amount of borrowing required for the next year

b.	the break even price needed to cover all costs of cotton production

c.	labor needed on the farm during the next year

d.	the change in profit from installing an irrigation system in one field

Question 12

Which of the following are the profit increasing changes on a partial budget?

a.	additional costs and additional revenue

b.	reduced costs and reduced revenue

c.	reduced costs and additional revenue

d.	additional costs and reduced revenue

Question 13

In the short run:

a. total fixed costs are zero when there is no production

b.	total variable costs are zero when there is no production

c.	total costs are zero when there is no production

d.	neither total fixed costs nor total variable costs are zero when there is no production

Question 14

When preparing a cash flow budget it is important to

a.	take into account the timing of cash inflows and outflows

b.	include all noncash expenses

c.	include only noncash revenues

d.	omit family living expenses and other personal withdrawals

Question 15

A cash flow budget can be used to

a.	estimate when and how much money will need to be borrowed during the year

b.	estimate when and how much debt can be repaid during the year

c.	estimate when excess cash may be available so plans can be made to invest it

d.	all of the above

Question 16

A cash flow analysis of an investment in a new capital asset should include projections for

a.	several months

b.	one year on a monthly basis

c.	one year for the whole year only

d.	several years

Question 17

A production possibility curve shows:

a.	all combinations of two inputs which will produce a fixed amount of output

b.	all combinations of two outputs which can be produced from a fixed amount of input

c.	various amounts of output which can be obtained from different amounts of a variable input

d.	a fixed amount of profit that is possible from producing different combinations of two outputs

Question 18

Fixed costs that result from owning farm assets such as machinery include all but which of the following:

a.	Fuel and lubrication

b.	Depreciation

c.

Insurance

d.

Interest