Unit 4 Portfolio Part 1
You want to start a bakery business to earn money. The total amount of money you will invest is $10,000. You will be selling cakes. It will cost you $14 to make each cake.
d)
Using your answer from part b and your equation from part c, what is the most money you can hope to earn from your business?
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1 point
The most money I can hope to earn from my business can be calculated by subtracting the total cost of making the cakes from the total amount of money I will invest.
Total earnings = Total investment - Total cost of making cakes
Total earnings = $10,000 - ($14 x total number of cakes)
To find the most money you can hope to earn from your business, we need to consider the equation from part c which states that the total revenue earned is the product of the selling price and the number of cakes sold.
In part b, we found that the selling price is $21 per cake.
Let's denote the number of cakes sold as "x".
Thus, the equation to calculate the total revenue earned is:
Total Revenue = Selling Price * Number of Cakes Sold
Total Revenue = $21 * x
However, we know that the total investment is $10,000 and it costs $14 to make each cake. Therefore, the maximum number of cakes that can be made is given by:
Maximum Number of Cakes = Total Investment / Cost of Making Each Cake
Maximum Number of Cakes = $10,000 / $14
Now, we can substitute this maximum number of cakes into the equation for total revenue to find the most money you can hope to earn from your business:
Total Revenue = $21 * Maximum Number of Cakes
Therefore, the most money you can hope to earn from your business is $21 multiplied by the maximum number of cakes, which is $21 multiplied by ($10,000 / $14).
To find out the most money you can hope to earn from your business, we need to consider the equation from part c, which states that the profit is equal to the revenue minus the cost.
In this case, the revenue would be the amount of money you earn from selling the cakes, and the cost would be the amount of money you spend to make each cake.
From part b, we determined that each cake will be sold for $30.
Let's calculate the profit per cake:
Profit per cake = Revenue per cake - Cost per cake
Profit per cake = $30 - $14
Profit per cake = $16
Now, we know that the total amount of money you will invest in the business is $10,000. Since each cake generates a profit of $16, we can calculate the maximum number of cakes you can make with your investment:
Maximum number of cakes = Total investment / Cost per cake
Maximum number of cakes = $10,000 / $14
Maximum number of cakes = 714.28 (rounded to the nearest whole number)
So, the most money you can hope to earn from your business is the profit per cake multiplied by the maximum number of cakes:
Most money you can hope to earn = Profit per cake * Maximum number of cakes
Most money you can hope to earn = $16 * 714
Most money you can hope to earn = $11,424
Therefore, the most money you can hope to earn from your bakery business is $11,424.