# MAT 540 WEEK 1 TO 11(Strayer)

**Topics:**Average, Forecasting, Linear regression

**Pages:**18 (5755 words)

**Published:**September 21, 2014

MAT 540 WEEK 1 TO 11(Strayer)

MAT540 Week 1 Homework

Chapter 1, Problems 2, 4, 12, 14, 20, 22

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, Problems 18, 20, 26, 28, 30

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...

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