BMM1014 Mathematics for Managers (Tutorial 1)

Tutorial 1 (Linear Equations and Functions)

1) Find the equation of the line passing through the points ( 3,5 ) and ( 3,10 ) ?

2) Write the an equation for the graph shown.

3) A toy company spends RM 1500 per day for factory expenses plus RM 8 to make each
teddy bear. They sell the teddy bears for RM 12 a piece. Find the number of bears x
the company has to sell in one day to equal its daily cost.

4) What is the break-even point in units for a company whose total fixed costs are
RM275,450; selling price per unit is RM16; and variable cost per unit is RM14.75?

5) A company has a fixed cost of RM30,000 and a production cost of RM6 for each CD
it manufactures. Each CD sells for RM10.
a) What is the cost function?
b) What is the revenue function?
c) What is the profit function?
d) Compute the profit (loss) corresponding to production levels of 6000, 8000 and
12,000 units, respectively.

6) ABC is a small firm that produces electric plugs. The following are the information of
the firm:

Selling price = RM2.50

Variable cost = RM2 per plug
Fixed cost = RM35, 000 per year

If the firm expects to be able to sell 15,000 plugs, what price should be charged in
order to break even?

Page 1|2
BMM1014 Mathematics for Managers (Tutorial 1)

7) An insurance company purchases an SUV for its employees. The original cost is
RM30,500. The SUV will depreciate linearly over 5 years, and will then have a scrap
value of RM10,300.
a) What is the rate of depreciation?
b) Give a linear equation that describes the SUV’s book value at the end of t years
of use.
c) What will be the SUV’s book value at the end of the third year?

8) Manufacturer A sells a particular product for RM440. Production costs are as follows:

Fixed costs RM5,400,000

Variable costs RM395 per unit

a) Calculate the number of units to be produced and sold for break-even.

Manufacturer B sells a similar product. By investing in newer machinery, production

costs are as follows:
Fixed costs RM7,680,000
Variable costs RM300 per unit

This product is sold for RM357 per unit.

b) Calculate the level of production for which the two methods have the same
total costs.
c) Compare the profits of the two manufacturers for production and sales of
200,000 units.
d) Calculate the level of production and sales for which the two methods produce
the same profit or loss.

Page 2|2