De La Salle University – Dasmariñas

COLLEGE OF SCIENCE AND COMPUTER STUDIES

MATHEMATICS AND STATISTICS DEPARTMENT
City of Dasmariñas, Cavite
SMATH311LC - MANAGEMENT SCIENCE
1st Semester / Midterm Period / S.Y. 2020-2021

ENABLING ASSESSMENT 2
COST-VOLUME-PROFIT MODELING

September 17, 2020 Score:

Jared U. Tolosa
NAME: __________________________________ DATE: ___________________

BSA 32 Ms. Challiz Gigante

COURSE/YEAR & SECTION: __________________ PROF.: ___________________

Read, understand and solve each item carefully. Show your complete solution on the answer column.

QUESTIONS ANSWERS
1. Micromedia offers computer training seminars on a 1a. C(x)= FC + VC(x)
variety of topics. In the seminars each student works
at a personal computer, practicing the particular C(x)= 9600+(60)(2)(x)
activity that the instructor is presenting. Micromedia is
currently planning a two-day seminar on the use of C(x)=9600+120x
Microsoft Excel in statistical analysis. The projected fee 1b. P(x)= R(x)-C(x)
for the seminar is $600 per student. The cost for the
conference room, instructor compensation, lab P(x)= 600x-(9600+120x)
assistants, and promotion is $9600. Micromedia rents
computers for its seminars at a cost of $60 per P(x)= 480x-9600
computer per day.
1c. P(x)=480x-9600
a. Develop a model for the total cost to put on
the seminar. Let x represent the number of P(30)=480(30)-9600
students who enroll in the seminar.
P(30)=P 4,800
b. Develop a model for the total profit if x
students enroll in the seminar.
1d. Let x be the breakeven point
0= R(x)-C(x)
c. Micromedia has forecasted an enrollment of
0= 480x-9600
30 students for the seminar. How much profit
480x=9600
will be earned if its forecast is accurate?
x=20 students
d. Compute the breakeven point

2. Eastman Publishing Company is considering 2a. Let x be the breakeven point

publishing a paperback textbook on spreadsheet 0= 46x-(160000+6x)
applications for business. The fixed cost of manuscript
40x=160000
preparation, textbook design, and production setup is
x= 4,000 copies
estimated to be $160,000. Variable production and
material costs are estimated to be $6 per book. 2b. P(3500)=R(x)-C(x)
Demand over the life of the book is estimated to be
4000 copies. The publisher plans to sell the text to P(3500)=40(3500)-160000
college and university bookstores for $46 each.
a. What is the breakeven point? P(3500)=(P 20,000) loss
2c. Let SP be the minimum selling price per copy
b. What profit or loss can be anticipated with a 0=3500 SP-(160000+6(3500))
demand of 3500 copies? 3500 SP=181000
SP=P 51.714
c. With a demand of 3500 copies, what is the 2d. P(x)=R(x)-C(x)
minimum price per copy that the publisher must
P(x)=50.95(4000)-(160000+6(4000))
charge to break even?
P(x)=203800-184000
P(x)=P 19,800
d. If the publisher believes that the price per It is recommended to increase the selling price
copy per copy to P50.95 since it will generate profit
could be increased to $50.95 and not affect the taking into consideration that the anticipated
anticipated demand of 4000 copies, what action demand remains unaffected.
would you recommend? What profit or loss can be
anticipated?