Chapter 2 Review Question Solutions

  1. a.
    x 20 24 28 32 36 40
    C 420 468 516 564 612 660

    b. C = 180 +12x  ↵

  2. 62.5 = 2.4A + 1.7B ↵
  3. b. y = 220 −10x, where x is the temperature and y is oil usage; c. 270 litres ↵
  4. a. Copier A: C =$120 +$0.05x (x = number of pages; C = total cost); Copier B: C =$250 +$0.03x b. 5,000/month: Total cost for A = $370 Total cost for B = $400 Copier A is cheaper 10,000/ month: Total cost for A = $620 Total cost for B = $550 Copier B is cheaper d. Costs are equal when x = 6,500 ↵
  5. a. C =$16,000 +$92.50x (C = total costs; R = total revenue; x = number of stereos sold); R =$150x b. Breakeven = 279 stereos (rounded up from 278.26) For a $6,000 profit number of stereos = 383 ↵
  6. a. y= 4 + 2x    b. y = 2 + 1.5x    c. y = 9- 2x ↵
  7. a. y = 450 + 11x   (y = time in minutes; x = number of widgets) b. 5,950 minutes or 99.17 hours c. 401 widgets ↵
  8. a. R= 58x;  C = $126,000 + 21.50x; x = number of tires b. 3452.05 round up to 3453 tires c. 4547.9 round up to 4548 tires ↵
  9. a. Method B is cheaper by $9.00 b. 187.5 kilometres c. C = $25 + $0.15x ↵
  10. (0.1389, 2.7222) ↵
  11. (-1, 2) ↵
  12. a. b = $13,000 −$300p; (p = price; b = number of books) b. 6,400 books ↵
  13. a. C = $49,875 + $27.50h; (C = total costs; h = number of housings) b. fixed costs = $49,875; variable costs = $27.50 per housing c. 1,814 housings ↵
  14. a. C = $21,952 + $ 29.52x; (C = total cost; x = number of cabinets produced) b. 2,589 cabinets ↵
  15. d = 11,600 − 450p ↵
  16. a. C = $1,900 + $40x; (C = total cost; x = number of jackets made) b. $9,100 c. 127 jackets ↵
    1. y = −11 + 3x
    2. y = −7 − 5x
    3. y = 2.5 + 0.25x
    4. y = 4 + x
    5. y = −11 −4x
    6. y = −6 − 2x
  17. ↵
    1. C = $0.75 + $ 0.35x where x = length of time of the call (in minutes); C = total cost of the call.
    2. $21.75
  18. ↵
    1. C = $7,500 + $15x where x = number of passengers; C = total cost to fly the plane
    2. $7,500
    3. It would cost $7,500 to fly the plane empty (i.e., with no passengers).
    4. $15
    5. It costs an extra $15 for each additional passenger.
    6. $7,710
  19. ↵
  20. a. C =$3,000 + $40x b. $3,000 c. The cost incurred even when no chairs are produced i.e., the overhead or expenses, (e.g., rent, property taxes). d. $40 e. Each additional chair made will cost $40 (the cost of labor and materials). f. $19,000 g. 140 chairs ↵
  21. a. CA = $100 + $0.40x, CB = $40 + $0.80x b. and c:
    # Km x Total Cost CA Total Cost CB
    0 $100 $40
    300 $220 $280

    d. Below 150 km it is cheaper to use B; above 150 km it is cheaper to use A. e. The costs are equal at 150 km (both cost $160) ↵

  22. a. C = $150,000 + $800x; R = $1,500x; x = the number of bedroom suites produced and sold b. 215 suites (rounded up from 214.3 units) ↵
  23. a. 18,750 units/ 37,500 units b. $25,000 profit/ $5,000 loss ↵
  24. a. C = $2,070 + $12x; R = $150x ; x = the number of passengers on the plane b. 15 passengers c. $276 profit d. 20 passengers e. $138/passenger↵
  25. a. R = $10x; C = $150,000 +$4x; x = the number of bags produced and sold b. 25,000 bags of cat food, revenue = $250,000; 50% capacity c. $310,000 d:
    Number of Bags Revenue Cost
    0 0 $150,000
    50,000 $500,000 $350,000
    25,000 $250,000 $250,000

    e. $11.50/bag ↵

  26. a. R = $15x, C = $12,000 + $8x, x = the number of shavers produced and sold b. 1,715 shavers (rounded up from 1714.28). Sales: $25,725 c. $3,400 d. $5,500 e. 2,429 shavers f. 2,572 shavers (after rounding up) g. 6,000 shavers h. 33.33% I. $15.80/shaver ↵
  27. a. CA= $3,000; CB = $2,000 + $0.05x; CC = $1,000 + $0.15x; where x = the number of copies b. A: $3000; B: $2,750; C: $3,250 so B is cheapest for 15,000 copies c. CA= CB at 20,000 copies; CA= CC at 13,333 copies; CB = CC at 10,000 copies d. Plot these points below. Your lines must cross at the indifference points you found in (c). If not, your graph is wrong.
    Number of copies (x) Cost A Cost B Cost C
    0 $3,000 $2,000 $1,000
    30,000 $3,000 $3,500 $5,500

    e. A is cheapest for more than 20,000 copies, B is cheapest between 10,000-20,000, copies C is cheapest below 10,000 copies ↵

 

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