MGT3100 REVIEW SLIDES

CLASS 10
 A restaurant sells hamburgers for  $17.33/hamburger.
Expenses for the restaurant include raw material for
each hamburger at $9.23, $191.80 for monthly rental and
$50.00 for monthly peril insurance. How many hamburgers
should the restaurant sell in a month to break even?

PROFIT A restaurant sells hamburgers for  $17.33/hamburger.

Expenses for the restaurant include raw material for

MODEL
each hamburger at $9.23, $191.80 for monthly rental and
$50.00 for monthly peril insurance. What is your profit if
the restaurant sells 2500 hamburgers in a month?

What is profit per day if you sell 100 hamburgers in a day

and there are 30 days in a month?

What will its revenue be…

What is contribution margin..
 The price of product X is $106, variable costs for the product
is $75 and fixed costs (including staff salaries, maintenance)
amount to $4000 per month. The company operates only 25
days in a month and produces 90 units per day. But during one

TOO weekday demand rose to 110 units. The cost of lost sales is $9
per unit.  Leftover products can be sold for $50 per unit.  What

MUCH OR
would be the profit  in this scenario?

TOO
LITTLE The price of product X is $106, variable costs for the product
is $75 and fixed costs (including staff salaries, maintenance)

DEMAND
amount to $4000 per month. The company operates only 25
days in a month and produces 90 units per day. But during one
weekday demand fell to 75 units. The cost of lost sales is $9
per unit.  Leftover products can be sold for $50 per unit.  What
would be the profit  in this scenario?
 Based on the equation Y = 8.35 + 248.3*X, Sales(Y) is in
USING Units of $10.00 and Advertising(X) is in Units of $100.

THE
REGRESSI
What is the value of X entered into the equation if
$11,851 is spent on advertising?(Round your answer

ON
to 2 decimal places)

EQUATIO What are Sales when $11,851 is spent on advertising?

N (Round your answer to 1 decimal places)

1. WHAT WILL BE
THE BIAS FOR
THE TABLE
BELOW? (ROUND Three
period

YOUR ANSWER moving

average      

TO 2 DECIMAL Absolute Squared

Abs
Percent
PLACES) Period Sales($millions) Forecast
1 6.5
Error Error Error error

2 5.0
2. WHAT IS THE 3
4
7.5
11.0
RMSE? 5 11.5

3. WHAT IS THE
SQUARED ERROR
FOR PERIOD 4?
 UNDERSTANDING PROFIT & QUANTITY AT CROSSOVER POINT

Profit 1 = Profit 2
P1*X – VC1*X – FC1 = P2*X – VC2*X – FC2

X(Units) = (FC1-FC2)/(P1 – VC1 –P2 +VC2) Profit at Crossover Point

= (FC1-FC2)/ (CM1- CM2) = Profit 1
= FC/CM =CM1 * X(units) – FC1

 (point of indifference i.e. crossover point)?

 SUMPROD
UCT
.

Solve using the principle of

Sum producct
 ANSWERS
GTAs: Please allow students to work through the problems before sharing answers.
QUESTION 1
Part 1. A restaurant sells hamburgers for  $17.33/hamburger. Expenses for the restaurant include raw material for each hamburger at $9.23, $191.80 for monthly
rental and $50.00 for monthly peril insurance. How many hamburgers should the restaurant sell in a month to break even?

Part 2. A restaurant sells hamburgers for  $17.33/hamburger. Expenses for the restaurant include raw material for each hamburger at $9.23, $191.80 for monthly
rental and $50.00 for monthly peril insurance. What is the profit if the restaurant sells 2500 hamburgers in a month?

What is profit for the day if you sell 100 hamburgers in a day and there are 30 days in a month?
what will its revenue be…
what is its contribution margin..
Do they change extra for cheese?

Price per unit $ 17.33

Raw material $ 9.23
Rent $ 191.80
Insurance $ 50.00

Part 1 Part 2
Breakeven 30 units Quantity sold 2500
Profit month $ 20,008.20
Q sold 100
Days in the month 30
Daily profit $ 801.94
 The price of product X is $106, variable costs for the product is $75
and fixed costs (including staff salaries, maintenance) amount to
$4000 per month. The company operates only 25 days in a month and
produces 90 units per day. But during one week-day demand rose

TOO to 110 units. The cost of lost sales is $9 per unit.  Leftover products
can be sold for $50 per unit.  What would be the profit  in this

MUCH OR
scenario?
Profit = 106(90) – 75(90) – 160 – 20(9) = $ 2450

TOO
LITTLE
The price of product X is $106, variable costs for the product is $75
and fixed costs (including staff salaries, maintenance) amount to
$4000 per month. The company operates only 25 days in a month and

DEMAND produces 90 units per day. But during one week-day demand fell to 75
units. The cost of lost sales is $9 per unit.  Leftover products can be
sold for $50 per unit.  What would be the profit  in this scenario?
Profit = 106(75) – 75(90) – 160 + 15(50) = $1790
 Based on the equation Y = 8.35 + 248.3*X, Sales(Y) is in
Units of $10.00 and Advertising(X) is in Units of $100.

USING
THE
What is the value of X entered into the equation if
$11,851 is spent on advertising?(Round your answer
to 2 decimal places) = 11851/100 =118.51
REGRESSI
ON What are Sales when $11,851 is spent on advertising?
(Round your answer to 1 decimal places)
EQUATIO = 8.35 + 248.3 * 118.51 = 29434.383 *10 =
N $294,343.83
1. WHAT WILL BE
THE MAPE (MEAN
ABSOLUTE
PERCENT ERROR) Three
OF THE TABLE period
BELOW? (ROUND moving
average      
ANSWER TO 2 Abs
DECIMAL PLACES, Period
Absolute Squared
Sales($millions) Forecast Error Error Error
Percent
error
KEEP IN DECIMAL 1 6.5
FORMAT DON'T 2 5.0
CONVERT TO %) 3 9.5
ANS .32 4 11.0 7.00
5 11.5 8.33

2. WHAT IS THE ABS

PERCENT ERROR
FOR PERIOD 5
ANS .28
 UNDERSTANDING PROFIT & QUANTITY AT CROSSOVER POINT

Profit 1 = Profit 2
P1*X – VC1*X – FC1 = P2*X – VC2*X – FC2

X(Units) = (FC1-FC2)/(P1 – VC1 –P2 +VC2) Profit at Crossover Point

= (FC1-FC2)/ (CM1- CM2) = Profit 1
= FC/CM =CM1 * X(units) – FC1

 (point of indifference i.e. crossover point)?

(37,270 – 23,180) / ([69 – 19] – [52 – 30]) (35,010 – 21,380) / [(64.8-20) – (52.2 – 27)]
14,090 / 28 = 503.21 Qty 13630 / 19.6 = 695.4082 Quantity

Crossover Qty would work with both products: Crossover Profit would work with both products:
You can check to see if you’re correct 695.4082 * (64.8 – 20) – 35,010
([69 – 19] *503.21) – 37,270 Or  -3,855.71 loss
Or  -12,109 695.4082 * (52.2 – 27) – 21,380
(22*503.21) – 23,180
SUMPRODUCT
.15*29 =4.35
.26*32 =8.32
.37*57 =21.09
.234*10=2.34

4.35+8.32+21.09+2.34=36.1
GENERAL
QUESTIONS
FROM
STUDENTS