Question

0 Sub Haven, a small sandwich store, is located on a busy corner near many other businesses. The shop's busiest time is during the mid-day period. Rent for the location is $900 per month, and wages amount to $2800 per month. Variable costs consist of supplies and sandwich ingredients that cost $2.07 per sub sandwich. The subs are to be sold at a price of $5.99 each. Answer each of the following independent questions (a) How many sandwiches must the shop sell to break even? (b) If the shop increases variable costs by 50.18 per sandwich, how many sandwiches must it sell to break even? (c) If the rent increases by 6%, what would the profit be if the shop sold 1615 units? (d) If the sandwich price was reduced by S018, how many sandwiches must the shop sell to make S1143 profit? (a) The shop must sell sandwiches to break even (Round up to the nearest whole number.) (b) If variable costs increase by 50.18 per sandwich, the number of sandwiches required to break even is (Round up to the nearest whole number) (c) the rent increased by 6% and the shop sold 1615 units, the shop would make a(n) profit. (Round to the nearest cent as needed.) (d) If the selling price of $5.99 is reduced by $0.18 and a profit of $1143 is required, then the number of sandwiches that needs to be sold is (Round up to the nearest whole number)

Answer 1

© Finced cost a Rent + wages 900 + 2800 3700 variable costa $ 2.07 per sub sandwich. .: cost function, C(O)- 3700+ 2.078, cohere ne number of sandwich Revenue function REX) 2 prieexx z 5.990 a> Break-even point! 200) = R(2) >> 3700+ 2.07% = 5.99 >> 3700 2 3922 ay xz 943.877 2 1944 b) If variable cost increases by $0.18 Then, 20) = 3700 +2,07% +0.18% 23700+ 2.25% - RIM). z 2(a) > 5.99.902 3700+2:25%

=> 3.74223700 2) X2 989.3048 0989 rent 6 100 25.81 c) If scent increased by 67. 80, increase in = 900x -54 .: C(26) 23700 +54 + 2.07% => 2(X) 23754 +2:07% z> C(1615) -3754 +2:07 x 1615 2 7097.05. R(1615) 25.99 x 1615 29673-85 · profit 967385 - 7097.05 22576.80 [Rim) -C(27 d) New selling price 5.99 -0.18 R(X) = 5.812 C(2_) 2 3700 +2.07.2. Given RIU) -C() z) 5.812 - 3700 -2.09% = 1143 >> 3.7422 4843 X z 1294.91 11295 Day Rent = 181.00, wage = 264.35. :: Cost fenetion C(X) 2 181 +264.35+ 4.61% >> CLA) 2 445.35+4.61%. RCOL) > 9.68762 where x is number of Calender for break-even point, RCX)2 2(X) >> 9-68% 2445.35 +4.613 1143

>> 5.07 X2445.35 zy 2 2 87.84 Ñ188 b) cost frenction COC 2181+ 311 + 4.612 => 2690) 2492 +4.618 27 € (206) = 492 +4.61X206 = 1441166 New price 9.68 9.68x19 27.8408 I. REX) 27.84080 => R(206) 27.8408 X206 = 1615.2048. 100 :. profit 21615. 2048 1441.66 2 173.5448 173.54

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