Unit 1 CS MOA

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Slide 1 - Title Slide

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Unit I Practice Problems

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Slide 2 - Instructions

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The following slides contain practice problems from page 18 in the textbook. Try to solve the problems, then watch the video solution to check your work. To play the video, simply click on the video and it will open in a new tab.

Instructions

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Slide 3 - Question 1-16

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Problem: Ray Bond sells handcrafted yard decorations at county fairs. The variable cost to make these is $20 each, and he sells them for $50. The cost to rent a booth at the fair is $150. How many of these must Ray sell to break even?

Question 1-16

Solution:

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Slide 4 - Question 1-17

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Problem: Ray Bond, from Problem 1-16, is trying to find a new supplier that will reduce his variable cost of production to $15 per unit. If he was successful in reducing this cost, what would the break-even point be?

Question 1-17

Solution:

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Slide 5 - Question 1-18

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Problem: Katherine D’Ann is planning to finance her college education by selling programs at

the football games for State University. There is a fixed cost of $400 for printing these

programs, and the variable cost is $3. There is also a $1,000 fee that is paid to the university for

the right to sell these programs. If Katherine was able to sell programs for $5 each, how many

would she have to sell in order to break even?

Question 1-18

Solution:

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Slide 6 - Question 1-19

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Problem: Katherine D’Ann, from Problem 1-18, has become concerned that sales may

fall, as the team is on a terrible losing streak and attendance has fallen off. In fact,

Katherine believes that she will sell only 500 programs for the next game. If it was

possible to raise the selling price of the program and still sell 500, what would the price

have to be for Katherine to break even by selling 500?

Question 1-19

Solution:

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Slide 7 - Question 1-20

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Problem: Farris Billiard Supply sells all types of billiard equipment and is considering manufacturing its

own brand of pool cues. Mysti Farris, the production manager, is currenlty investigating the production

of a standard house pool cue that should be very popular. Upon analyzing the costs, Mysti determines

that the materials and labor cost for each cue is $24, and the fixed cost that must be covered is $2,400

per week. With a selling price of $40 each, how many pool cues must be sold to break even? What

would the total revenue be at this break-even point?

Question 1-20

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Solution:

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Slide 8 - End Slide

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Unit I Practice Problems

You have reached the end of the Unit I practice problems. Click the Restart button to return to the beginning if you need further review. Otherwise, you may close your browser window to exit.

Title slide image reference:

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Baranau, D. (n.d.). ID 162189502. Dreamstime. https://www.dreamstime.com/budget-data-people-vector-business-analysis-person-concept-

illustration-financial-account-statistic-graph-management-chart-report-image162189502