Allied & ICAR Exam Bank • ALLIED_2946 NAT • 2 Marks

Section 2: Farm Machinery

Farm Machinery

Subtopic: Cost analysis of implements and tractors

Question Statement:

If annual fixed cost of a machine is $\text{Rs. }20,000$, variable cost per hectare is $\text{Rs. }500$, and custom hiring rate is $\text{Rs. }1000\text{ per hectare}$, the break-even acreage in hectares is:

Answer Key:

40

Step-by-Step Solution & Explanation

$A = \frac{20000}{1000 - 500} = \frac{20000}{500} = 40\text{ hectares}$.
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