If a soybean producer expects to receive $5.50 per bushel for his/her soybeans, has total fixed costs of $60/acre and has total variable costs of $160/acre, the expected break-even soybean yield for this producer is

If a soybean producer expects to receive $5.50 per bushel for his/her soybeans, has total fixed costs of $60/acre and has total variable costs of $160/acre, the expected break-even soybean yield for this producer is

• A. 20 bu/acre
• B. 40 bu/acre
• C. 60 bu/acre
• D. 80 bu/acre

Answer: (B)

Break-even yield is where total revenue covers total costs. Total costs per acre are fixed costs plus variable costs: 60 + 160 = 220 dollars per acre. Revenue per acre is price per bushel times yield, so 5.50 × yield = 220. Solving gives yield = 220 / 5.50 = 40 bushels per acre. So the break-even yield is 40 bu/acre. At yields below 40, there’s a loss; above 40, there’s profit.

Break-even yield is where total revenue covers total costs. Total costs per acre are fixed costs plus variable costs: 60 + 160 = 220 dollars per acre. Revenue per acre is price per bushel times yield, so 5.50 × yield = 220. Solving gives yield = 220 / 5.50 = 40 bushels per acre. So the break-even yield is 40 bu/acre. At yields below 40, there’s a loss; above 40, there’s profit.