In: Accounting
Assignment Questions Q 1. Maria has a few chickens in her backyard to sell eggs that she doesn't eat. She spent AED 4700 to build the shed for chicken. She invests another AED 200 in buying 400 high quality hens. She buys 150-pound sack of feed for AED 560 and water is essentially free. It takes the 400 hens a month to finish sack of feed and during that time she collects 840 eggs, which she sells for AED 15 per dozen. a) What is her break-even point in dozens? b) What is her profit the first month? c) How many months pass before she realizes a profit from this enterprise? Q 2. What are some issues with an analyst's use of mathematical models in an organization? Q 3. Once a quantitative solution has been found to a business problem, what are the considerations in implementing it? Q 4. Explain the quantitative analysis approach? Also discuss three categories of business analytics. Q 5. Explain the quantitative approach to decision making? Describe the 7 steps in the quantitative methods?
Answer for Q. 1.
Fixed Expenditure made by Maria
for Shed : AED 4700
for High quality Hens (400Nos.) : AED 200
Total Fixed Expenditure : AED 4900
Variable Expenditures - Monthly:
Sack of Feed (150 Pound) : AED 560
Water : Free
Total Varibale Cost : AED 560
Variable cost per dozen Sale : Varibale Cost/(Units/12)
= AED 560/(840/12) = AED 8 per dozen
a). break-even point in dozens : Fixed Cost /(Sales Price per dozen-variable cost per dozen)
= AED 4900/(15-8) = 700 dozen
b). Maria profit the first month :
Income : 840 eggs sold for AED 15 per dozen i.e. 15*840/12 = AED 1050
Variable Expenditure (i.e. Cost of goods Sold) : AED 560
Gross Profit = Income - Cost of goods Sold i.e. AED 1050- AED 560
= AED 490
c). How many months pass before she realizes a from his enterprise :
Sale per month : 840 eggs i.e. 70 dozens egg
Break Even Point : 700 Dozen
i.e. 700 Dozen/70 Dozen = 10 months will pass before maria reliazes profit from his enterprise.