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 A product for RO 50 per unit. Variable costs per unit are
RO 35 and fixed costs equal Ro 45.000. How many units
must be sold in order to break even? An enterprising college
student has decided to purchase a local car wash business.
The purchase cost is RO 15,000. Car wash will be priced at
RO 5, and variable cost per car (Soap, water, oil, labor and
etc.) is expected to equal RO 1.5. a. How many cars must be
washed in order to break even? b. How many cars must be
washed in order to recover the purchase price RO 15,000?
The life expectancy E, of males in the year 1980 was 68

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years. It increased to 75 years in the year 1991. a. Express E

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as a linear function of time. b. Determine the life expectancy

o.
in the year 2005. A mineral water company delivers 13000
rs e
ou urc
litres water per day and delivers 5 days a week. The cost of
transport for delivery is RO 35000; the delivery cost is 500
o

baisa per litre (including fuel, labor and etc.). The company
aC s
vi y re

sells 800 baisa per litter. a. What is the total cost and
revenue if they deliver for x weeks? b. After how many
weeks the total cost will be recovered? A firm produced a
ed d
ar stu

single product and sells for RO 50 per unit. Firm defined a

profit function P(x) = 35 x - 400, where x, the number of
is

units produced and sold. a. Find the total cost function in

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term of x. the number of units produced and sold b. Also

estimate the total cost if the firm produced and sold 700
units. A tablet manufacturing company introduces sales
sh

incentive to the employees that increases the cost of the

tablet. The total cost function of a company for x tablets is
C(x) = 70x + 65,000. a. What Is the total fixed cost for the

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 company? b. What is the total variable cost for the company?
c. If each tablet is sold for RO 203, determine the minimum
number of tablets that must be produced and sold to ensure
no loss. d. if at least 400 tablets be sold daily, what price
should company charge per piece of tablet to guarantee no
loss.

Solution

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Answer 1.

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Selling Price = 50

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Variable Cost per unit = 35
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Contribution Margin per unit = 50 – 35
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Contribution Margin per unit = 15
Fixed Costs = 45,000
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Break-even Point = Fixed Costs / Contribution Margin per

aC s

unit
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Break-even Point = 45,000/15

Break-even Point = 3,000 units
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Answer 3.
ar stu

Let E = a + b*x, where x is the year.

68 = a + b*1980
75 = a + b*1991
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Solving above 2 equations, we get a = -1199.20 and b = 0.64

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Therefore, E = -1,199.20 + 0.64*x

When x = 2005, E = 84 years
Answer 5.
sh

Part a:
Selling Price = 50
Revenue = 50x
Profit = 35x-400

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 Revenue - Cost = 35x - 400
50x - Cost = 35x - 400
Cost = 15x + 400
Part b:
Cost = 15*700 + 400
Cost = 10,900

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