Rose Hill, a soybean farm in northern Minnesota, has a herd of 25 dairy cows. The cows produce ap- proximately 1,400 gallons of milk per week. The farm currently sells all its milk to a nearby processor for $1.25 per gallon, a significant drop from the $2.00 per gallon they were able to charge five years ago. It costs $1.60 per gallon to produce the milk. The owners of Rose Hill are deciding whether to sell the dairy cows or expand into the artisan cheese market. Both owners have prior cheese-making experience and they already have all the needed equipment It takes .8 gallons of milk to make a pound of cheese. Costs to produce a pound of cheese are ex- pected to total 57 per pound. Artisan cheeses are currently selling for Tek? per pound at farmer's markets and upscale groceries.

Please answer the following three questions.

1. What is the break-even point (in gallons) on all dairy operations?

2. How many gallons of milk should be used to make cheese?

3. How many gallons of milk should be sold to a processor?

Answer rating: 100% (QA)

1 5 years ago the break even point would be 22402 1120 gallons of milk sh... View the full answer