A dairy farm has $40$ cows, each producing an average of $22$ L of milk per day. Milk sells for N120 per litre. The farm incurs fixed costs of N150,000 per month and a variable cost of N30 per litre of milk produced.

(a) Calculate the monthly profit.

(b) The farmer wishes to increase the profit by 20 % by improving the average daily milk yield per cow (all other factors remain unchanged). What should be the new average daily milk yield per cow (in litres, to one decimal place)?

Question

A dairy farm has $40$ cows, each producing an average of $22$ L of milk per day. Milk sells for N120 per litre. The farm incurs fixed costs of N150,000 per month and a variable cost of N30 per litre of milk produced.

(a) Calculate the monthly profit.

(b) The farmer wishes to increase the profit by 20 % by improving the average daily milk yield per cow (all other factors remain unchanged). What should be the new average daily milk yield per cow (in litres, to one decimal place)?

Accepted Answer

Monthly profit: N2,226,000; New yield: 26.1 L per cow

Neco 2022 Agricultural Science Question 15

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