Eastern Africa International College

Faculty of Business and Economics

Department of Accounting and Business Management
Mathematics for social Science Worksheet I (20%)

1. Let F denotes degree faranite and C denotes degree celcious and assume
that the relationship between these two temperatures scales is linear. Two
data points on the line relation C and F are (5, 41) and (25, 77). Using
these points determine the slope intercept equation.

2. Suppose the fixed cost for producing product X be Birr 2,000. Variable
costs is Birr 10 per X produced. If the total cost is represented by Y:
(a) Write the equation of these relations in slope intercept form
(b) State the slope of the line and interpret this number.
(c) State the y intercepts of the line and interpret this number.

3. A manufacturing company can sell Q units of its product at a price of $

90 each. It costs the company 800 + 75Q to produce Q units.
a. Derive the equation that expresses the relationship between
annual total cost (y) as the function of units Produced Q.
b. Derive revenue equation
c. Calculate BEQ at BEP
d. Calculate profit (loss) at BEQ
e. How many units should the company sell to generate revenue of
$ 81,000?
f. How many units should be produced and sold to obtain a profit of
$ 6,800?
g. Draw break even graph

4. A printer quotes a price of $ 7,500 for printing 1,000 copies of a book

and $ 15,000 for printing 2,500 copies. Assuming a linear relationships
and that 2,000 books are printed:
(a) Find the equation relating to total cost, Y to X, the number of
books printed.
(b) What is the variable cost?
(c) What is the fixed cost?
(d) What is the variable cost /book?
(e) What is the average cost/book?
(f) What is the marginal cost of the last book printed?
5. Find the breakeven point computed in sales dollars, Y, if fixed costs are
Br. 10,000 and variable costs are 60% of the selling price.

6. A company plans to work on a margin of 46% of retail and to incur other

variable costs of $0.16 per dollar of sales. A fixed cost equals $25,000.
a. Find the equation relating total cost to sales
b. Find the breakeven sales.
c. Construct break even chart.
d. Suppose sales are $100, 000, what will be the profit before taxes?
e. We want to make profit before taxes of $20,000, what should be the
revenue level?

7. In its first year of operation Abol Bunna Company had the following
experience.
Sells = 25,000 units Selling price = Br. 100
TVC = Br. 1,500,000 Total fixed cost = Br. 350,000
Based on the above fact, answer the following questions.
A. Develop revenue, cost and profit functions in terms of
quantity.
B. Find the Breakeven point in terms of quantity
C. Convert the cost equation in terms of quantity into the cost
equations in terms of revenue
D. Find the BER (Xe)
E. (e) If the profit had been Birr 500,000, what would have been
the sales volume and the quantity of sales?
F. What would have been the profit if sales had been Br.
2,000,000?

8. Find the equilibrium price (P) and quantity (X) if the demand function is
2P = 14 –q and supply function is 12P = 14 +q

9. Given:
Supply schedule: X = 500 + 20P
Demand schedule: X = -100 + 40P
Required: Find the equilibrium Price and quantity.

10.XYZ Company manufactures videotapes for use in video records. The

company makes three grades of tapes – X, Y, & Z. Below are production
and sales data for the year.
 Product sales price Variable Expected % of
unit sold
X Birr 5.00 3.00 60
Y Birr 7.00 4.50 30
Z Birr 9.00 6.00 10
The total fixed costs were = Birr 2,115,000
a. Calculate the breakeven point in units and in Birr for each
product.
b. Calculate the volume and sales in total units and total sales Birr
necessary to achieve a 30 percent return on sales.

11. Compute the number of units of product that must be sold if the
company is to break-even is each of the following independent situations.
a. A variable cost of Birr 7 per unit of product is equal to 70% of
the selling price. The fixed cost for the year is Birr 141,000.
b. Contribution margin is equal to 24% of the revenue. Each unit
of product sells for Birr 50. The fixed cost is Birr 432,000.

12.Gift trading earned an income before income tax last year of Birr
525,000. The fixed cost of operation amounted to Birr 450,000. The
variable cost to produce and sell the line amounted to Birr 35 per unit.
The selling price per unit was 50. Compute the sales revenue for last
year.

(a) ABC Company sells a certain product line at an established

price of Birr 42 per unit. The variable cost per unit is Birr 36.
The fixed cost for the year amounts to Birr 540,000. Next year
the selling price is to be increased to Birr 45 per unit.
a. How many units had to be sold at the old established price each
Year in order to breakeven?
b. How many units would have to be sold at the new price each year
in order to breakeven?