Algebra, STD1 EQ-Bank 31

A cake-shop owner sells muffins for $2.50 each. It costs $1 to make each muffin and $300 for the equipment needed to make the muffins.

The owner uses a spreadsheet with formulas to model this situation.

How many muffins need to be sold to ‘break-even’? (1 mark)

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How much profit is made if 400 muffins are sold? (2 marks)

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Show Answers Only

a. $\text{200 muffins}$

b. $\text{Profit} =\$ 300$

Show Worked Solution

a. $\text{By inspection of the spreadsheet:}$

$\text{Total cost = Revenue = \$500}\ \ \Rightarrow\ \ \text{200 muffins}$

$\text{Breakeven when 200 muffins sold.}$

b. $\text{When 400 muffins are sold:}$

$\text{Revenue} =400 \times \$ 2.50=\$ 1000$

$\text{Cost} =400 \times 1+\$ 300=\$ 700$

$\text{Profit} = 1000-700=\$ 300$