Chapter Three Flashcards
- A farmer has a gross output of €40,000 and costs of fertiliser €4,000, seeds €250, spray €500, insurance €1500, land rent €5000 and feed €1,500.
a. What is the farmers gross margin?
Gross margin = Gross output minus variable costs (costs related directly to that enterprise).
- A farmer has a gross output of €70,000. If the variable costs are €58,000 and fixed costs are €3,200, then what is the farmers net profit ?
Net Profit/Net Margin = Gross output minus (variable and fixed costs)
- List an example of a technology that can aid dairy farmers.
Milking parlour technology
- Why a farmer would use the Teagasc Cost Control Planner System.
It’s a Microsoft Excel Spreadsheet based program used to record receipts and payments for a farm business. Its used to prepare a nuber of reports you can use to monitor your farm business.
- What is a fixed cost?
Fixed costs are costs which cannot be allocated to a particular enterprise on the farm. They are costs incurred on most businesses irrespective of their size or intensity of their businesses. They includes machinery repairs, diesel, car expenses, ESB, telephone, permanent labor, lase and rental payments, interest on farm loans, insurance, bank charges, accountancy fees and advisory fees.
- List TWO examples of a variable cost
A variable cost is a cost that can be allocated to a particular enterprise on the farm. For tillage farmers that would be fertilser, lime, seed, sprays, transport, machinery hire, casual labour etc.
For livestock farmers variable costs would be feed, fertilizer, transport, vet, AI, casual labour etc.
- Explain what is Gross Output
Gross Output = (Sales + Closing Stocks) - (Livestock Purchases + Opening Stocks).
The Gross output is the value of products produced by an enterprises.
- List TWO Key Performance Indicators KPI’s in relation to farm enterprises.
Physical Performance indicators - The farms physical/technical performance. Includes things like yield, calving difficulty, stocking rates, weight gain.
Financial performance
- Give an example of a website that will provide data to help measure key performance indicators.
Kingswood, Agrinet and Farmflo. Teagasc eProfit Monitor.
- What is the purpose of the Teagasc Road maps?
Sources of guidelines and targets for both the physical and financial performance of different farm enterprises. They outline the future prospects of different farm sectors and provide detailed physical performance targets.
- List TWO benefits of a positive health and safety-conscious culture has?
- What is Employers liability
- What is the difference in ‘’fully comprehensive cover’’ vs ‘’third party fire and theft’’?
What is turnover? Cash flow? Profit?
How are loan repayments calculated?
