MATHEMATICS OF BUSINESS AND FINANCE

(A) A bike manufacturing company has fixed costs of $125,000 per annum and the variable costs are 43% of sales. If the variable costs increased to 51% of sales, what additional sales must be made to break-even?

(B) Sandra's company has a machine that can produce a maximum of 52,000 components per annum. She sells each component for $3.80. The fixed costs are $35,000 per annum and variable costs are $0.32 per component.

a. What is the break-even volume? (Round up to the next whole number)

b. What is the break-even revenue? (Round to the nearest cent)

c. What is the break-even as a percent of capacity per annum? (in %) {Round to two decimal places}

d. If she produced and sold 12,200 components in a year, what was the profit made or loss incurred? (Express the answer as a positive number for profit and negative number for loss, rounded to the nearest cent)

e. What is the maximum profit per year that she can expect from her company?