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##### MAT540 week 1 assignment

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Question;MAT540;Week 1 Homework;Chapter 1;2. The;Retread Tire Company recaps tires. The fixed annual cost of the recapping;operation is $60,000.The variable cost of recapping a tire is $9.The company;charges $25 to recap a tire.;a. For an annual volume of 12,000 tires, determine;the total cost, total revenue, and profit.;b. Determine the annual break-even volume for the;Retread Tire Company operation.;4. Evergreen;Fertilizer Company produces fertilizer. The company?s fixed monthly cost is;$25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen;sells the fertilizer for $0.40 per pound. Determine the monthly break-even;volume for the company.;12. If;Evergreen Fertilizer Company in Problem 4 changes the price of its fertilizer;from $0.40 per pound to $0.60 per pound, what effect will the change have on;the break-even volume?;14. If;Evergreen Fertilizer Company increases its advertising expenditures by $14,000;per year, what effect will the increase have on the break-even volume computed;in Problem 13?;Reference Problem;13: If Evergreen Fertilizer Company changes its;production process to add a weed killer to the fertilizer in order to increase;sales, the variable cost per pound will increase from $0.15 to $0.22. What;effect will this change have on the break-even volume computed in Problem 12?;20. Annie;McCoy, a student at Tech, plans to open a hot dog stand inside Tech?s football;stadium during home games. There are seven home games scheduled for the;upcoming season. She must pay the Tech athletic department a vendor?s fee of;$3,000 for the season. Her stand and other equipment will cost her $4,500 for;the season. She estimates that each hot dog she sells will cost her $0.35. She;has talked to friends at other universities who sell hot dogs at games. Based;on their information and the athletic department?s forecast that each game will;sell out, she anticipates that she will sell approximately 2,000 hot dogs;during each game.;a. What price should she charge for a hot dog in order to break even?;b. What factors might occur during the season that would alter the volume;sold and thus the break-even price Annie might charge?;22. The College of Business at Tech is planning;to begin an online MBA program. The initial start-up cost for computing equipment;facilities, course development, and staff recruitment and development is;$350,000.The college plans to charge tuition of $18,000 per student per year. However;the university administration will charge the college $12,000 per student for;the first 100 students enrolled each year for administrative costs and its;share of the tuition payments.;a. How many students does the college need to enroll in the first year to;break even?;b. If the college can enroll 75 students the first year, how much profit will;it make?;c. The college believes it can increase tuition to $24,000, but doing so;would reduce enrollment to 35. Should;the college consider doing this?;Chapter 11;18. The;following probabilities for grades in management science have been determined;based on past records;Grade;Probability;A;0.10;B;0.30;C;0.40;D;0.10;F;0.10;1.00;The grades are assigned on a 4.0 scale, where an A is a 4.0, a B a 3.0, and;so on. Determine the expected grade and variance for the course.;20. An investment;firm is considering two alternative investments, A and B, under two possible;future sets of economic conditions, good and poor. There is a.60 probability;of good economic conditions occurring and a.40 probability of poor economic;conditions occurring. The expected gains and losses under each economic type of;conditions are shown in the following table;Economic Conditions;Investment;Good;Poor;A;$900,000;-$800,000;B;120,000;70,000;Using the expected value of each investment alternative, determine which;should be selected.;26. The;weight of bags of fertilizer is normally distributed, with a mean of 50 pounds;and a standard deviation of 6 pounds. What is the probability that a bag of;fertilizer will weigh between 45 and 55 pounds?;28. The;Polo Development Firm is building a shopping center. It has informed renters;that their rental spaces will be ready for occupancy in 19 months. If the expected time until the shopping;center is completed is estimated to be 14 months, with a standard deviation of;4 months, what is the probability that the renters will not be able to occupy;in 19 months?;30. The;manager of the local National Video Store sells videocassette recorders at;discount prices. If the store does not have a video recorder in stock when a;customer wants to buy one, it will lose the sale because the customer will;purchase a recorder from one of the many local competitors. The problem is that;the cost of renting warehouse space to keep enough recorders in inventory to;meet all demand is excessively high. The manager has determined that if 90% of;customer demand for recorders can be met, then the combined cost of lost sales;and inventory will be minimized. The manager has estimated that monthly demand;for recorders is normally distributed, with a mean of 180 recorders and a;standard deviation of 60. Determine the number of recorders the manager should;order each month to meet 90% of customer demand.

Paper#60809 | Written in 18-Jul-2015

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