CHAPTER 1

Applications and more algebra

Chapter Outline
1.1) Applications of Equations
1.2) Linear Inequalities
1.3) Applications of Inequalities
1.4) Absolute Value
Chapter Summary
*Profit = Total Revenue – Total Cost
Price x Quantity VC+FC

*At the breakeven point, Total revenue = Total cost & the profit is equal to 0.
Section 1.1
Problem 1

■ A corn refining company produces corn cattle feed at a variable cost of 82$ per ton. If
the fixed costs are 120,000$ per month and the feed sells for 134$ per ton, how many
tons must be sold each month for the company to have a monthly profit of 560,000$?
VC = 82/ton
FC = 120,000
TR = 134/ton
Profit = 560,000

let q = number of tons sold

∵ Profit = Revenue - Cost
560,000 = 134q - (82q + 120,000)
560,000 = 134q - 82q - 120,000
560,000 + 120,000 = 134q - 82q
∴ 52q = 680,000
so, q = 13,077
Section 1.1
Problem 2

■ The smith company management would like to know the total sales units that are
required for the company to earn a profit of 150,000$. The following data are available;
unit selling price of 50$, variable cost per unit of 25$, total fixed cost of 500,000$.
From these data, determine the required sales units?
VC = 25/unit
FC = 50,000
TR = 50/unit
Profit = 150,000
let q = number of units sold
∵ Profit = Revenue - Cost
150,000 = 50q - (25q + 500,000)
150,000 = 50q - 25q - 500,000
150,000 + 500,000 = 50q - 25q
∴ 25q = 6500,000
so, q = 26,000
Section 1.1
Problem 3

■ A person wishes to invest 20,000$ in 2 enterprises so that the total income per year will be
1440$. One enterprise pays 6% annually, the other has more risk and pays 7½% annually.
How much must be invested in each?

20,000
let 6 % investment be (x)
let 7.5% investment be (20,000 - x)
total earned amount = A + B
A B
1,440 = 6%(x) + 7.5% (20,000 - x) 6% 7.5%
1,440 = 0.06x + 1,500 - 0.075x
-60 = -0.015x
∴ x=4,000

4,000$ invested at 6% 16,000$ invested at 7.5% (20,000 - 4,000)

Section 1.1
Problem 4

■ A manufacturer of video games sells each copy for 21.95$. The manufacturing cost of
each copy is 14.92$. The monthly fixed costs are 8500$. During the first month of
sales of a new game, how many pieces must be sold for the manufacturer to break
even?
Total Revenue = Total Cost
Profit = 0
VC = 14.92/unit
TR = 21.95/unit
FC = 8500
let q = number of units sold
∵ Profit = Revenue - Cost
0 = 21.95q - (14.92q + 8500)
0 = 21.95q – 14.92q - 8500
8500 = 21.95q – 14.92q
∴ 7.03q = 8500
so, q 1,209
Section 1.2
Solve the inequalities

1) 5x-11 9
5x ≤ 20
X≤4
0 4
X ɛ ] -∞ , 4]

2) 3 < 2y + 3
0 < 2y
0<y
X ɛ ] 0 , ∞[ 0

3) 2(4x-2) > 4(2x+1)

8x - 4 > 8x + 4
0>8
Undefined

4) 5-7s > 3
-7s > -2
S < 2/7 0 2/7
S ɛ ] -∞ , 2/7[
Section 1.3
Problem 1

■ A builder must decide whether to rent or buy an excavating machine. If he were to rent
the machine, the rental fee would be 3000$ per month (on a yearly basis), and the daily
cost (gas, oil, and driver) would be 180$ for each day the machine is used. If he were to
buy it, his fixed cost would be 20,000$ , and daily operating and maintenance costs
would be 230$ for each day the machine is used. What is the least number of days that
the builder would have to use the machine to justify renting rather than buying it?

Rent < Buying

12x3000 + 180d < 20,000+230d
16,000 < 50d
320 < d
At least 321 days
Section 1.3
Problem 2

■ The Davis Company manufactures a product that has a unit selling price of 20$
and a unit cost of 15$. If the fixed costs are 600,000$. Determine the least no. of
units that must be sold for the company to have a profit.

Profit > 0
Revenue - cost > 0
20q – (600,000 + 15q) > 0
20q – 600,000 - 15q > 0
5q > 600,000
q > 120,000
more than 120,000 units need to be sold to earn profit
Section 1.3
Problem 4

■ A businesswoman wants to determine the difference between the costs of owning

and leasing an automobile. She can lease a car for $420 per month (on an annual
basis). Under this plan, the cost per mile (gas and oil) is$0.06. If she were to
purchase the car, the fixed annual expense would be $4700, and other costs would
amount to$0.08 per mile. What is the least number of miles she would have to drive
per year to make leasing no more expensive than purchasing?

Leasing Purchasing
120x420 + 0.06m 4700 + 0.08m
5040 + 0.06m 4700+0.08m
5040-4700 0.08m – 0.06m
340 0.02m
17,000 m
 Section 1.4
Solve the following
1) = 2
X-3 = -2 X-3 = 2
X=1 X=5
X ={1,5}
2) = -4

3) < 4
-4 < x-2 < 4
-2 < x < 6
X ]-2,6[ -2 0 6

4) 7
-7 x+5 7
-12 x 2
-12 0 2
X ]-,-12[ ]2,
Section 1.4
Solve the following

5) > 2
-2 2

-8 x 8 -8 0 8
X ]-,-8[ ]8,
5) Y + < +

30y + 15y < 10y + 6y

45y < 16y
29y < 0
y<0 0
X ]-,0[