MATH6102–BUSINESS MATHEMATICS

Week 1
Application and More Algebra
1.1 APPLICATIONS OF EQUATIONS
• Equation is an equality between two statements
which have the same meaning. (Haeusler, Paul, & Wood, 2011)

• Example 1 - Mixture
• A home industry needs 4 parts of flour, 3 parts of
butter, 2 parts sugar, and 1 part of egg to make a
kind of cake. If a cake’s weight 100 grams, how
much of each ingredient should be used?
Solution:
Let n = number of grams in each part.
4n + 3n + 2n + n = 100
10n = 100
n = 10
Each ingredient has 10 grams
Amount of flour = 4n = 40 grams
Amount of sugar = 3n = 30 grams
Amount of butter = 2n = 20 grams
Amount of egg = n = 10 grams
Profit
• Profit = total revenue − total cost
• Total revenue = (price per unit) x
(number of units sold) = PQ
• Total cost = variable cost + fixed cost
• Fixed cost = all of costs that are independent of
the level of production quantity
• Variable cost = all of costs that are dependent
on the level of output. (Haeusler, Paul, and Wood, 2011)
 Example 2 - Profit

• CV. Maju Jaya produces a product for which

the variable cost per unit is $5 and the fixed
cost is $10,000. Each unit has a selling price
of $10. Determine the number of units that
must be sold for the company to earn a profit
of $50,000.
 Example 3 – Investment

A total of $20,000 was invested in two

business ventures, A and B. At the end of the
first year, A and B yielded returns of 6.5%
and 5 %, respectively, on the original
investments. How was the original amount
allocated if the total amount earned was
$2,800? (Haeusler, Paul, & Wood, 2011)
1.2 LINEAR INEQUALITIES
Haeusler, Paul, & Wood (2011)
Haeusler, Paul, & Wood (2011)
• Formula of linear inequality can be written
in the form ax + b < 0 here a and b are
constants and
a0
• To solve an inequality involving a variable is
to find all values of the variable for which
the inequality is true. (Haeusler, Paul, & Wood, 2011)
Example 1 – Solving a Linear
Inequality
Example 2 – Solving a Linear
Inequality
1.3 APPLICATIONS OF INEQUALITIES
 Example 1 - Profit

• A company manufactures a product, the

combined cost for labor and material is $20
per unit. Fixed costs (costs incurred in a given
period, regardless of output) are $80,000. If
the selling price of a product is $60, how
many must be sold for the company to earn a
profit?
Example 2 – Current Ratio
The president of Forever Young Sports Equipment
Company decides to take out a short-term loan to
build up inventory. The company has current assets
of $400,000 and current liabilities of $80,000. How
much can the company borrow if the current ratio is
to be no less than 2.25? (Note: The funds received
are considered as current assets and the loan as a
current liability.)
Haeusler, Paul, & Wood (2011)
 Reference
• Haeusler, E.F. Jr., Paul, R.S., Wood, R.J. (2011). Introductory
Mathematical Analysis for Business, Economic, and The Life
and Social Sciences. 13th Edition. New Jersey : Pearson
International Edition, New Jersey.
Thank You