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Bus - Maths Worksheet 1

1. The document provides several word problems involving business concepts like production costs, revenue, profit, break-even analysis, and linear equations. It asks the reader to define equations, calculate outputs, costs, revenues, profits, and break-even points for different production and sales scenarios. 2. One problem asks the reader to determine the equation of a line relating the number of tourists to a city each year based on data showing steady growth. 3. Another asks the reader to calculate the costs, revenues, profits, and break-even point for a company manufacturing and selling chairs with given fixed, variable and selling costs and prices.

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109 views2 pages

Bus - Maths Worksheet 1

1. The document provides several word problems involving business concepts like production costs, revenue, profit, break-even analysis, and linear equations. It asks the reader to define equations, calculate outputs, costs, revenues, profits, and break-even points for different production and sales scenarios. 2. One problem asks the reader to determine the equation of a line relating the number of tourists to a city each year based on data showing steady growth. 3. Another asks the reader to calculate the costs, revenues, profits, and break-even point for a company manufacturing and selling chairs with given fixed, variable and selling costs and prices.

Uploaded by

Petros Melaku
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Arsi University

College Of Business and Economics


Department of Management
Mathematics for Business
Work sheet one
1. A company manufactures two different products. For the coming week 120 hours of labor are
available for manufacturing two products. Work hours can be allocated for production of either
product. In addition, since both products generate a good profit, management is interested in using
all 120 hours during the week. Each unit produced of product A requires 3 hours of labor and
each unit of product B requires 2.5 hours.
Required:
(a) Define an equation which states that total work-hours used for producing the two units?
(b) How many units of product A can be produced if 30 units of B are produced?
(c) If management decides to produce one product only, what is the maximum quantity which can be
produced of product A?
2. The chairman is trying to forecast the number of tourists who would be visiting the city of Bihar
Dar in the coming years. Some students from the local university have examined the problem as a
part of their class project. They estimated the current year's Volume as 60,000 tourists. They have
also projected that the volume in the next year will be 67,500 and that the volume in the future
will continues to grow at the same rate. Determine equation of a line which relates the number of
tourists, p to Years t as measured from this current year?
3. A company is planning to manufacture and market new chairs. After conducting extensive
market survey, the research department provides the following estimates: weekly fixed cost is
14,000 and variable cost is Birr 140 per unit. If the price of each chair is estimated to be Birr 150,
a) Find cost, revenue and profit functions
b) What is the profit or loss as one chair is produced and sold?
c) If the cost of raw material is increased by 15%, how would the answer in b would change?
d) What will be the revenue, total variable cost, total cost and profit if 5000 units were sold?
4. Suppose a merchandising company, has purchased an item at a cost of Birr 130 and priced to
be sold at Birr 200. If it incurs selling expense of 10%, and FC of Birr 12,000:
a) What is mark up and marginal?
b) What will be the total cost?
c) At what level of sales that the company break-even?

1
5. ABC merchandising firm plans to work on a margin of 46% of retails and it incurs other
variable cost of Birr 0.16 per Birr of sales. A fixed cost equals to Birr 25,000.
a) Find the equation relating total cost to sales?
b) Find the BEP?
c) What would be net profit before taxes if sales are Birr 100,000?
d) If the firm wants to make profit before taxes of Birr 20,000, what should be the revenue
level?
6. A company expects fixed cost of Birr 22,800. Margin is to be 55% of retail. Variable cost in
addition to cost of goods is estimated at birr 0.17 per Birr of sales.
a) Write the equation relating cost and sales
b) Find the breakeven point
c) What will be net profit before taxes be on sales of Birr 75,000?
7. A publisher asks a printer for quotations on the cost of printing 1,000 and 2000 copies of a
book. The printer quotes $ 4500 for 1000 copies and $ 7500 for 2000 copies. Assume that cost,
y, is linearly related to x, the number of books printed,
a. Write coordinates of the given points
b. Write equation of a line
c. Interpreter slop of a line.
d. If 200 copies were made, what will be the total cost?
e. Find x - intercept and y intercept of the line?
f. Draw a graph for a line
9. A manufacturer has a fixed cost of Birr 120,000and a variable cost of Birr 20 per unit made
and sold. Selling price is Birr 50 per unit.
a) Write the revenue and cost equations (use C for total cost and x for number of units
b) Compute profit if 10,000 and 5000 units are made and sold?
c) Find the breakeven point i) in quantity ii) in Birr value of sales
d) Construct the break even chart
e) What should be the level of output produced and sold if the company contemplates to generate
profit of Birr 60,000?
f) If the manufacturer’s plant capacity is 20,000 units, determine break even as percent of
capacity?

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