Introduction to Economics — Unit test Answers

Radwyn Horticulture is a company which focuses upon selling saplings. The company can grow a sapling for $15.45, and can sell that sapling for $36.50. There are three main salespeople at Radwyn Horticulture, each of whom earns a different commission per sapling sold, as shown in the table below. Salesperson Commission/Sale Lara $8.15 Ian $11.25 Ari $8.90 Radwyn Horticulture’s fixed overhead expenses last month came to $7,699.45. It is known that one salesperson sold 191 saplings, one salesperson sold 245 saplings, and one salesperson sold 221 saplings. Which arrangement of sales would cause Radwyn Horticulture to break even?

Below is last month's business income statement for Korey's Comics. Using the information provided in the statement, determine net income for Korey's Comics last month.Korey?s Comics Monthly Business Income Statement RevenueSales:$6,825 Returns:$215 Net Sales: Cost of Goods Sold Beginning Inventory:$780 Purchases:$1,795 Goods Available for Sale: Ending Inventory:$795 Total Cost of Goods Sold: Gross Profit:: Operating ExpensesWages:$1,460 Rent:$650 Utilities:$185 Advertising:$90 Taxes:$125 Total Operating Expenses: Net Income:

In order to clear out room for new merchandise, James decided to mark down some of the items for sale in his electronics store. He marked down DVD players by 36%, and he marked down stereo tuners by 22%. If DVD players cost $41.60 after the markdown and stereo tuners cost $69.42 after the markdown, which item’s price was reduced by more, and by how many dollars more was it reduced? Round all dollar values to the nearest cent.

Put the following items in order from most expensive to least expensive.ItemBase PriceChangeDirectionToaster$23.3536%MarkupDVD$20.3666%MarkupHeadphones$69.0956%MarkdownJeans$55.0841%Markdown

Korey is planning to open a comic book store. In his first year of operation, Korey expects to average $1,000 of profit each month. He then expects profits to increase by 6% each year for the next 4 years. How much does Korey expect to make in profits in his fifth year of operation?

Penny bought a juice squeezer for $10. She can make a bottle of orange juice for a cost of $0.75, and she sells her orange juice for $1.85 per bottle. Which of the following graphs best illustrates Penny’s situation? I. II. III. IV.

It costs a petroleum refinery $0.39 to refine one gallon of gasoline, and $0.39 to refine one gallon of natural gas. The refinery can sell gasoline for $2.11 per gallon, and can sell natural gas for $1.60 per gallon. Due to the refining process, the refinery must produce and sell twice as much natural gas as it does gasoline. If the refinery’s monthly overhead costs, not including production costs, are $180,000, how many gallons of natural gas will the refinery have sold when it breaks even each month? Round to the nearest whole gallon, if necessary.

A software store has put some of its inventory on sale. Games are marked down by 15%, and security programs are marked down by 18%. If you pay $35.70 each for two games and $22.96 for a security program, how much have you saved?

Which of the following statements best describes the difference between markup and margin?

Which of the following statements best describes the difference between net income and gross profit?

The table below shows possible cost and revenue equations for a manufacturer of cameras. Cost I Cost II Revenue III Revenue IV Which of the following pairs of equations will never break even?

A floor lamp originally cost $44.50. Over a period of two months, it underwent the following changes in price.62%Markup15%Markdown18%Markup20%Markup45%MarkdownWhat is the final price of the floor lamp? Round all dollar values to the nearest cent.

Which of the following expenses is not a variable cost?

Because of his business's recent success, Sam has decided to expand his Sam's Swimming Pool Cleaning to include another branch. This will add expenses for another office and payroll for five more employees, but Sam's customer base will stay the same, at least for a while. Until Sam's new branch starts bringing in new customers, how will this change affect Sam's net profit margin?

The following graph displays the cost and revenue functions for Jake’s homemade wicker baskets. How many baskets must Jake sell to break even?

Gabrielle and her business partners are starting a new business that sells organic shampoo. After analyzing the market they have a projected sales forecast showing that they must sell 50,000 bottles of shampoo in 12 months to break-even. Calculating the variable unit cost and projected unit price gives a break-even volume of 45,000 bottles. Why should the projected unit price be changed based on the break-even volume?

Faye, George, and Hannah are salespeople working at Lasht Cellular. It costs Lasht Cellular $21.49 per phone to stock a certain brand of phone, which they sell for $68.75. The three salespeople earn differing amounts of commission per phone sold, based on their seniority. The following table shows their respective sales in the past month. Salesperson Phones Sold Commission/Phone Faye 214 $10.25 George 176 $8.90 Hannah 251 $9.65 If Lasht Cellular had fixed overhead costs of $14,350 last month, how much profit did it gain last month?

Sodresh Sundials manufactures large stone sundials. It costs $14.22 to produce a sundial, which can then be sold for $36.75. The following table shows Sodresh Sundials’s non-production overhead costs and sundials sold over a period of one year.MonthOverhead ($)SoldJan.9,176290Feb.7,510329Mar.7,952309Apr.7,071288May8,942303Jun.9,249329Jul.7,813400Aug.6,821350Sep.9,382382Oct.8,117329Nov.9,018425Dec.6,503424In how many months did Sodresh Sundials either break even or turn a profit?

Last year, Sam’s Swimming Pool Cleaning had a gross profit of $105,355 and net income of $72,010. Calculate Sam’s operating expenses for last year.

Jan went grocery shopping and only bought items which had been marked down. The items she bought, along with their prices, can be seen below. Item Final Price Markdown Chicken $8.47 15% Milk $2.16 20% Onions $0.89 10% Potato chips $1.45 12% Oranges $1.36 25% Flour $4.39 18% What would be the total of Jan's grocery bill if she purchased all of the items before they were marked down?