# Mat 540 Hw Essay

463 WordsAug 17, 20142 Pages
#2 a. Cost = 9*12000 + 60000 = 168000 Revenue = 12000 * 25 = 300000 Profit = 300000 - 168000 = 132000 b. 25 charge to recap - 9 variable cost = 16 60000 operation fee / 16 = 3750 break volume of tires 4 .40 per pound - .15 cost = .25 25,000 operational cost / .25 = 100,000 units to break even 12 .60 new cost - .15 = .35 25,000 / .35 = 55, 555.56 Break Even margin will decrease going from 100,000 to 55,555.56 Had to do Ref 13 in order to do number 14 .40 - .22 = .18 new cost 25,000 / .18 = 138,888.89 Break Even volume for #13 = 138,888.89 14. An additional 14,000 for advertising will increase the annual operating cost to: 25,000 + 14,000 = 39,000 The new operating volume will be: 39,000 / .18 = 216,667.67 Answer: operation volume will INCREASE from 138,888 to 216,667 20. 2000 hotdogs * 7 games = 14,000 hotdogs 14000 hotdogs * .35 cost of each hotdog = 4900 cost for all the hotdogs Fees = 3000 for vendor + 4500 for equipment = 7500 Total cost will be 7500 + 4900 = 12,400 You will sell 14000 hotdogs in the seven games. Therefore to break even you must sell each hotdog for: 12,400 / 14000 = .88 cents. You have to sell each hotdog for 88 cents to break even. b. Some examples are: Cost of equipment may go up. The number of hotdogs sold can increase (good) or decrease (bad). The number of attendees can decrease due to weather therefore a smaller number of people to buy hotdogs. 22. 350,000 = total cost 18,000 = tuition 12,000 fee for first 100 students a. 350,000 / (18000 tuition - 1200 fee) = 59 students have to enroll to break even b. (18000 tuition - 12000 fee for first 100 students) = 6000 75 students * 6000 = 450,000 450,000 - 350,000 = 100,000 profit for 75 students c. If tuition increases to 24000 then the profit per student for the 35 students is: 24000 -