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Walden Green's Cost per Bale and Revenue per Bale

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Walden Green provides custom farming services to owners of five-acre wheat fields. In July, he earned $2,400 by cutting, turning, and baling 3,000 bales. In the same month, he incurred the following costs: gas, $150; tractor maintenance, $115; and labor, $600. His annual tractor depreciation is $1,500. What was Green's cost per bale? What was his revenue per bale? Should he increase the amount he charges for his services?

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Solution Summary

The solution calculates Walden Green's cost per bale and revenue per bale and determines if the prices should increase.

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Costs per bale = total costs / number of bales = (gas + tractor maintenance + labor + monthly depreciation*) ...

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