31. A farmer has 240 acres under cultivation at $188.99 per acre. If he averages 60 bushels/acre, what is the expected profit if the price per bushel is $5.67?
Answer: B
The expected profit is $36,290.40.
To calculate the expected profit, we first determine the total revenue from selling the bushels and then subtract the total costs. The farmer cultivates 240 acres at an average yield of 60 bushels per acre, leading to a total output of 14,400 bushels. At a price of $5.67 per bushel, the revenue totals $81,888. The total cost of cultivation is $45,000, resulting in a profit of $36,290.40.
A) $30,000
This option is incorrect because it underestimates the profit calculated from the given parameters. The total revenue of $81,888 subtracting the total cost of $45,000 yields a profit significantly higher than $30,000.
B) $36,290.40
This option is correct as it accurately reflects the calculated profit after determining the total revenue from bushels sold and subtracting the total cultivation costs. The revenue of $81,888 minus the cost of $45,000 results in a profit of $36,290.40.
C) $40,000
This option is incorrect because it overestimates the profit. The correct profit calculation shows a difference of $36,290.40, which is lower than the $40,000 stated here, indicating a miscalculation of either revenue or costs.
D) $45,000
This option is also incorrect as it suggests that the profit equals the total cost of cultivation, which does not account for the revenue generated from selling the bushels. The actual profit is derived from the difference between total revenue and total costs, leading to a profit of $36,290.40, not $45,000.
Conclusion
The correct answer is definitively $36,290.40 because it is derived from the accurate calculation of total revenue from bushels sold minus the total costs incurred. All other options fail to reflect this proper calculation, leading to either overestimations or underestimations of the profit.