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INTRODUCTORY

MATHEMATICS AND
STATISTICS
TH

EDITION

SOLUTIONS MANUAL

John S. Croucher

Chapter 4
Ratios and proportions
Quick Quiz
1. (c)
2. (d)
3. (b)
4. (d)
5. (a)
6. (c)
7. (c)
8. (d)
9. (a)
10. (b)

Practice Questions
1.

969
100 = 950 km per 100 litres
102

2. Number of bags = 9
3. Current-asset ratio = $80 000 = 1.33
$60 000
This means that the business has $1.33 in current assets for every $1 in current
liabilities.
4. Acid-test ratio = 0.88
5. Debtor turnover = 13.16
Average collection period =

365

13.16

27.74 days

6. Average stock = 435 000


Stock turnover = 2.87
Hence stock turns over 2.87 times per year or once every 127 days.
7. Yolande $36 000
Introductory Mathematics and Statistics 6e, John S Croucher, 2013 McGraw-Hill Education (Australia) Pty Ltd
Solutions Manual, Chapter 4

Susie $16 000


Bank $38 000
8. $600 000
9. 24.1%
10. 43:70

Exercises
4.1

(a) Percentage of 1L cartons sold = 100

17%
40

Percentage of 600mL cartons sold = 100


17

= 42.5%
23%
40

= 57.5%

(b) Number of 1L cartons sold = 40 6600 = 2805


23

4.2

Number of 600 mL cartons sold = 40 6600 = 3795

(a) Percentage of 1L cartons sold = 24%

Percentage of 600 mL cartons sold = 76%


(b) Number of 1L cartons sold = 0.24 6600 = 1584
Number of 600 mL cartons sold = 0.76 x 6600 = 5016
4.3

(a) 4 : 3

(b) 1 : 6

(c) 2 : 5

4.4

(a) 13 : 8

(b) 3 : 4

(c) 3 : 4

4.5

Petrol usage =

1650
125

km/L

= 13.20 km/L = 1320 km/100 L


4.6

13 200 metres/L

4.7

(a) January
February
March
April

118.2
100.0
61.1
25.1

(b) January
March
April

18.2% increase
38.9% decrease
74.9% decrease

Introductory Mathematics and Statistics 6e, John S Croucher, 2013 McGraw-Hill Education (Australia) Pty Ltd
Solutions Manual, Chapter 4

4.8

(a) January
February
March
April

470.6
398.0
243.1
100.0

(b) January 370.6% more


February 298.0% more
March
143.1% more

4.9

(a)

568

25.82 pairs/minute

(b)

568

60 1549 pairs/hour

(c)

22 60

22

22

568

1 pair every 2.32 s

4.10

Sandra $13 750, Don $22 000, Annette $19 250

4.11

Sandra = $165 000 0.12 = $19 800


Don = $165 000 0.56 = $92 400
Annette = $165 000 0.32 = $52 800

4.12

Total asset turnover = $385 000 2.533


$152 000

4.13

Current-asset ratio = $132 000 1.10


$120 000
This indicates that the company has $1.10 in assets for every $1 in current
liabilities owed.

4.14

Current-asset ratio = $52 000 = 0.80


$65 000
This indicates that the bookstore has 80 cents in current assets for every $1 in
current liabilities owed.

4.15

Acid-test ratio = $132 000 $48 000 = 1.12


$120 000 $45 000

4.16

Acid-test ratio = $52 000 $14 000 = 0.86


$65 000 $21 000

Introductory Mathematics and Statistics 6e, John S Croucher, 2013 McGraw-Hill Education (Australia) Pty Ltd
Solutions Manual, Chapter 4

4.17

This means that in the previous year the local council had 67 cents in current
assets for every $1 in current liabilities owed, while this year the figure had
dropped to 58 cents.

4.18

(a) This means that in the previous year this local council had 76 cents in current
assets for every $1 in current liabilities owed, while this year the figure increased to
$1.77.
(b) Possibly the neighbouring council since the figure of $1.77 indicates it could
readily meet its obligations.

4.19

(a) Debtor turnover = $1 550 000 = 8.807


$176 000
(b) Average collection period = 365 days = 41.44 days
8.807

4.20

Carmel $600, Jack $1000, Mick $650, Tanya $250

4.21

Current-asset ratio = 43 000 = 1.65


26 000
This indicates that the company has $1.65 in current assets for every $1 in current
liabilities owed.

4.22

Total asset turnover = 250 000 = 2.58


97 000
2.58 100 = 258%
This indicates that there was a 258% turnover in sales in relation to assets; or for
every $1 of total assets the company generated sales of $2.58.

4.23

(a) Total asset turnover = 237.5%


(b) For every $1 of total assets, the company can generate sales of $2.38.

4.24

(a) Average stock = $110 000 + $230 000 = $170 000


2
Stock turnover ratio = $625 000 = 3.676
$170 000
On average, the stock turns over 3.68 times per year or once
365
every 3.68 = 99 days.

Introductory Mathematics and Statistics 6e, John S Croucher, 2013 McGraw-Hill Education (Australia) Pty Ltd
Solutions Manual, Chapter 4

4.25

(a) Average stock = $730 000


Stock turnover = $ 1 320 000 1.808
$ 730 000
(b) Stock turns over about every 202 days.

4.26

Bank overdrafts are not usually included in the calculation of the quick-test ratio since
it is uncommon for banks to demand sudden repayment of such overdrafts.

4.27

The quality of assets is an indication of how readily such assets can be converted into
cash to meet company obligations.

4.28

Check methods and answers are reasonable.

4.29

(a) Donna $31 666.67, Michael $9333.33, Annie $34 000


(b) Donna $40 000, Michael $16 000, Annie $44 000
(c) Donna $60 000, Michael $32 000, Annie $68 000

4.30

From Exercise 4.29


(a) Michael = $9333.33
(b) Michael = $16 000
(c) Michael = $32 000
If Michael is paid a straight salary of $25 000, under profits (a) and (b) Michael is
better off under the new arrangement.

4.31 Vijays average monthly investment = $444.44 = 21% Irenes average monthly
investment = $1666.67 = 79%
(a) Vijay = $4 200, Irene = $15 800
(b) Vijay = $8 400, Irene = $31 600
(c) Vijay = $21 000, Irene = $79 000
4.32

(a) Peter = 0.35 (50 000) = $17 500


Alan = 0.35 (50 000 17 500) = $11 375
David = 50 000 17 500 11 375 = $21 125
(b) Peter = $20 000
Alan = 0.35 (100 000 20 000) = $28 000
David = 100 000 20 000 28 000 = $52 000

Introductory Mathematics and Statistics 6e, John S Croucher, 2013 McGraw-Hill Education (Australia) Pty Ltd
Solutions Manual, Chapter 4

4.33

(a) Equal share = $16 666.67


Peter = $833.33, worse off Alan =
$5 291.67, better off David = $4
458.33, worse off
(b) Equal share = $33 333.33
Peter = $13,333.33, better off Alan
= $5,333.33, better off David =
$18,666.67, worse off

4.34

Goals 20, behinds 45

4.35

12 goals scored, 20 behinds scored

4.36

(a) Average = (4 15) + (6 24) = 20.4


10
(b) Average = (8 15) + (12 24) = 20.4
20

4.37

Browsing = 100 customers; Buying = 60 customers

4.38

There are 0.50 160 = 80 male customers


Of these, 0.60 80 = 48 males who browse, and 0.40 80 = 32 males who buy
Therefore 52 females browse and 28 females buy. The
female ratio is 52:28 or 13:7.

4.39

Let length of block A = L metres


Let width of block B = W metres Data:
(120 + 2W) (60 + 2L) = 40
or 2W 2L = 20
30
5
also, 60 = 8
or 4L = 5W

(1)
(2)

Solving (1) and (2) yields W = 40 and L = 50


Therefore area of block A = 30 50 = 1500m2
Area of block B = 40 60 = 2400 m2
4.40

Let radius of circle X = x metres


Let radius of circle Y = y metres
Data: 2x + 2y = 70
2

(1)

16
9

or 9x2 = 16y2

(2)

Introductory Mathematics and Statistics 6e, John S Croucher, 2013 McGraw-Hill Education (Australia) Pty Ltd
Solutions Manual, Chapter 4

Substitute for y in (2) using (1):


9x2 = 16(35 x)2
7x2 1120x + 19600 = 0
x2 160x + 2800 = 0 (x
20)(x 140) = 0 x = 20 or
140
Rule out 140 since it is unfeasible.
Therefore radius of circle X = 20m
Radius of circle Y = 15m.
4.41

Number in age group under 15 years = 49 004 031 28.5%


= 13 966 149
Number in age group 1664 = 49 004 031 65.8%
= 32 244 652
Number in age group 65 years and over = 49 004 031 5.7%
= 2 793 230

4.42

Total asset turnover = $7.43 million = 2.902


$2.56 million

4.43

(a) Debtor turnover = $2.73 million = 3.33


$0.820 million
(b) Average collection period = 365 days = 110 days
3.33

4.44

Current-asset ratio = $734 542 = 1.542


$476 241
This indicates that the company has $1.54 in assets for every $1 in current
liabilities owed.

4.45

Acid-test ratio = $734 542 $382 345 = 2.63


$476 241 $342 168
Since this is more than 100%, this would not be of concern.

4.46

Daily rate of sales = 83 + 43 = 126 = 2.8


22 + 23
45

4.47

Petrol usage = 84 = 7.24 km/L


11.6
= 724 km/100 L

Introductory Mathematics and Statistics 6e, John S Croucher, 2013 McGraw-Hill Education (Australia) Pty Ltd
Solutions Manual, Chapter 4

4.48

4.49

Speed of the ship = 1460 = 7.60 km/h


8 24
1 gallon
1mile

1 gallon

28 miles

4.54609188 litres

1.609344 kilometres
4.54609188 litres

1.609344 kilometres 28

= 2.8248
=

litres

kilometre

2.8248 litres per kilometre


28

= 0.1009

litres

kilometre

28 miles per gallon is equivalent to 10.09 litres per 100 kilometres

4.50

624

4.51

No. of 5kg bags sold = 32 58 = 20

4.52

$1 250 000 = 1.61


$776 200

72

100 = 866.67 km per 100 litres

This means that the business has $1.61 in current assets for every $1 in current
liabilities.
4.53

Debtor ratio = $876 750 =11.82


$74 200
365

4.54

Average collection period = 11.82 = 31 days


8:15

4.55

39:32

4.56

Total asset turnover = $2 300 000 =185%


$1 240 000

4.57

Stock turnover =

4.58

Total asset turnover = $475 200 = 0.54


$887 300

4.59
4.60

$536 000
= 0.65
($860 000 + $786 000)/2

4+12
16
=
4 + 6 + 8 + 12 30
0.54
3.60

= 15%

Introductory Mathematics and Statistics 6e, John S Croucher, 2013 McGraw-Hill Education (Australia) Pty Ltd
Solutions Manual, Chapter 4