Farm Management 10th Edition By Ronald Kay, William Edwards, Patricia Duffy (Test Bank)

Test Bank For Farm
Management 10th Edition By
Ronald Kay, William Edwards,
Patricia Duffy (All Chapters
1-22, 100% Original Verified A+
Grade)
Part 1: Chapter 12-22
Part 2: Chapter 1-11
All Chapters Arranged Reverse.

Correct Answers at the end of each Chapter.

,Chapter 12
Test Bank Part 1: Chapter 12-22
Student name:__________
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Only cash expenses are shown on a partial budget.
⊚ true
⊚ false

2) A partial budget includes only those costs and revenues which will change if the proposed
alternative is adopted.
⊚ true
⊚ false

3) When summarizing a partial budget, added revenue and added costs are summed together
first.
⊚ true
⊚ false

4) Opportunity costs are never included on a partial budget.
⊚ true
⊚ false

5) Changing a crop rotation to plant 80 acres more barley and 80 acres less wheat would be a
decision which could be analyzed using a partial budget.
⊚ true
⊚ false

6) Change in profit is the only factor to consider when looking at the results of a partial budget.
⊚ true
⊚ false

7) The budgeting unit for a partial budget can be either one acre or one head of livestock, or the
entire enterprise.
⊚ true
⊚ false

8) A partial budget analyzes only two management alternatives at one time.
⊚ true
⊚ false




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,Chapter 12



9) Only changes in variable or operating costs are included on a partial budget.
⊚ true
⊚ false

10) A single partial budget can analyze up to four alternatives.
⊚ true
⊚ false

11) In a partial budget a break-even value can be found for only one key variable at a time.
⊚ true
⊚ false

12) If the partial budget includes purchasing a new machine, there should be additional fixed
costs included in the budget.
⊚ true
⊚ false

13) Break-even analysis finds the value for a key number for which the expected change in profit
would be just zero.
⊚ true
⊚ false

14) Sensitivity analysis compares the changes in profit using several different values for a key
assumption in the budget.
⊚ true
⊚ false

15) Partial budgets include all costs and returns associated with the enterprises being considered.
⊚ true
⊚ false

16) A single partial budget can analyze up to four alternatives.
⊚ true
⊚ false




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, Chapter 12



MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
17) Which of the following may be included on a partial budget?
A) ownership costs
B) operating costs
C) opportunity costs
D) all of these

18) The values shown on a partial budget are
A) total revenue and total expenses for the farm.
B) only gross margins for the farm.
C) only total profit for the farm.
D) only changes in revenues and expenses for the farm.

19) 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

20) Which of the following are the profit decreasing changes on a partial budget?
A) additional costs and additional revenue
B) additional costs and reduced revenue
C) reduced costs and additional revenue
D) reduced costs and reduced revenue

21) If a partial budget shows some fixed or ownership costs under Reduced Costs, it means
A) the proposed alternative requires purchasing a new capital asset.
B) a new capital asset must be purchased next year with either alternative.
C) the proposed alternative would include the sale of a capital asset that will no longer
be needed.
D) there is an error on the budget as fixed costs are never included under Reduced Costs.

22) A partial budget is designed to analyze the effect of a proposed management change on
A) profit.
B) revenue only.
C) expenses only.
D) crop yields only.




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