GATE AG 2022 • Q20 MCQ • 1 Mark

Section 2: Farm Machinery

Farm Machinery

Subtopic: Cost analysis of implements and tractors

Question Statement:

Annual cost of owning (fixed cost) a particular combine harvester is Rs. 3,00,000 whereas, operating it would cost additional Rs. 6,000 per hectare. If an entrepreneur wishes to offer the machine for custom hiring, the combination of annual use (ha) and custom rate (Rs. ha⁻¹), respectively, that would fetch him the break-even condition is ______.

Options:

  • (A) 200 and 7,500
  • (B) 210 and 6,300
  • (C) 180 and 9,200
  • (D) 250 and 6,100

Official Answer Key:

A

Step-by-Step Solution & Explanation

• Break-even: R = (Fixed cost/ha) + Operating cost/ha • Testing (A): 300000/200 + 6000 = 1500+6000 = Rs. 7,500/ha — matches exactly. • Other options fail this check (e.g., (B): 300000/210+6000=7428.57≠6300).

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