Application Questions Flashcards
ABC Company sells product Y for a price of $50 per unit. The fixed cost associated with product Y is $85 000 and the variable cost is $12.50 per unit. What is the quantity of product Y that ABC Company will need to produce and sell to break-even?
Sales = Cost
Cost = 12.5x + 85000
Sales = 50x
50x = 12.5x + 85000
x = 2267
ABC Company sells product Y for a price of $50 per unit. The fixed cost associated with product Y is $85 000 and the variable cost is $12.50 per unit. What is the quantity of product Y that ABC Company will need to produce and sell to break-even?
1000 (1 +0.05) = 1050
1050 / (100%-30%) = 1500
As the owner of a catering business, you are required to provide a quote for possible events. You have been asked to provide a quote for wedding for 200 people. You know it will cost $32.00 per person in raw materials, and estimate it will take 12 people to work an eight hour shift each. Each staff member is paid $15.00 per hour. The customer will also be renting 20 tables at $10 per table from you. How much should you quote if you want to make a 20% profit?
200 * 32 = 6400
12 * 8 * 15 = 1440
20 * 10 = 200
8040 * 1.2 = 9648
About 25% of Zach’s pay goes to income taxes and other government deductions. If he borrows $1,000 at 6% interest, roughly how much will he need to earn to pay it off in one
1000 * 0.06 = $60 interest
1000 + 60 = $1060
1060 / (100%-25%) = 1413
Chris bought a hockey stick that regularly sold for $175. He received a 20 percent discount. How much did the stick cost before tax?
175 * (100% - 20%) = 140
You invested $1,000 in a 3-year GIC earning 1% interest compounded annually. How much interest will you receive at the end of year 3?
1000(1.01^3-1) + 30.30
Joe borrows $5,000 with a 5% annual interest rate to finance a construction project. For this loan to be profitable, the minimum amount this project must generate in annual earnings is:
5000 * 5% = 250
250 is break even so to make a profit Joe needs above 250 dollars
Avery’s credit card balance from last month was $969.81. She made $124.25 worth of new purchases this month and incurred a $40 late charge and $78.38 finance charge. If her new balance is $248.44, what was the amount of her payment this month?
Previous balance + new purchases + late charge + finance charge – payments = New balance Payments
$969.81 + 124.25 + 40 + 78.38 – 248.44 = $964
Ms. Thomson has approached you to borrow money. You decide to give her $7,500 at 6.5% for 10 weeks. Approximately how much money does Ms. Thomson owe you all together?
A = 75000 (1 +0.065)^10/52
A = 7591.38
The simple interest amount, where the principal is $500.00, the rate is 5.5 percent, and the time is one year, would be
500 * 0.055 = 27.5
Adam deposited $2,500 into a 30 day term deposit that has an annual interest rate of 6%. At the end of the 30 days, Adam will earn approximately __________ in interest
25000 * 0.06/12 = 12.5
The simple interest amount, where the principal is $1,500.00, the rate is 5.5 percent, and the time is one year, would be
15000 * 0.055 * 1 = 82.5
If $8,000.00 is compounded annually for 6 years at 5% interest, approximately how much would you have at the end of year 6?
A = 8000 (1+ 0.05) ^ 6
A = 10720.77
Misha and Molly want to buy a home together. They have found a home that they both like at a cost of $475,000. Based on current mortgage rates and a down payment of 10%, their mortgage payment would be $2,500 per month. Their combined gross income is $100,000 per year. Misha and Molly both have cars and make monthly payments on their loans of $400 each. Estimated heating and property tax costs are expected to be $500 per month. What is their Gross Debt Service ratio and their Total Debt Service ratio?
GDSR = Housing Costs / Monthly Household Income
GDSR = ((25000+500) / (100,000/12)) * 100
GDSR = 36%
TDSR = Housing Costs + Debts / Monthly Household Income
TDSR = ((2500+500+400+400) / 8333) * 100
TDSR = 46%
Amy’s parents invested $1,400 in a RESP on the day she turned 3 years old. Assume the investment can earn 7% per year. If the interest earned is reinvested each year, how much will the plan be worth when she turns 17 years old assuming no additional contributions were made (round to the nearest dollar)? For purposes of this calculation, please ignore any grant from the Government of Canada.
x = 1400 (1+ 0.07)^14
x = 3610
