Download 2nd Semester Study Guide

BUSINESS MATH STUDY GUIDE 2nd SEMESTER FINAL
CHAPTER 6
Lesson 1
Simple Interest
 Simple Interest = Principal x Rate x Time (I=PRT)
Amount Owed
 Principal + Interest
 If TIME does not = years ie Months / 12 Months (remember to use 3 #’s after the decimal)
Lesson 2
Monthly Interest Rate
 Principal x Rate = Interest Interest + Principal = Amount Owed New Amount Owed
Carries to Next MonthRepeat process 3 times
Semi-Annual Interest Rate (2 times a year)
 Principal x Rate = Interest Interest + Principal = Amount Owed  New Amount Owed
Carries to Next Semi Annual Term Repeat process 2 times
Quarterly Interest Rate (4 times a year)
 Principal x Rate = Interest Interest + Principal = Amount Owed  New Amount Owed
Carries to Next QuarterRepeat process 4 times
**When solving for amount owed if the Rate is an ANNUAL RATE and the problem asks you to
change that to a Monthly Rate / 12 months, to a Semi Annual Rate / 2 terms, to a Quarterly Rate / 4
quarters
Lesson 3
Total Assets
 Inventory + Receivables + Real Estate + Equipment + Cash = Total Assets
Line of Credit
 Total Assets x % of Assets = Line of Credit
Lesson 4
Total Revenue
 Cash Sales + Receivables + Other Income = Total Revenue per Month
Total Expenses
 Inventory + Payroll + Maintenance + Rent + Marketing + Interest = Total Expenses
Difference
 Total Revenue – Total Expenses = Difference
Cash Flow
 Same as Difference (if the number is negative put it in brackets, if it’s positive just re-write #)
Lesson 5
Product Payments
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Check Processing Fees
Dishonored Check Fees
Personnel Cost to Process Checks
Cash Transactions
Counterfeit Monies
Cost of Credit Transactions
CHAPTER 7
Lesson 1
Ratio
 Employee Salaries over Total Income = Ratio
Percent
 Employee Salaries / Total Income = Percent (%)
Lesson 2
Total Square Foot Needed
 Senior Manager, Director, Manager, Staff (Area x Number)
 Senior Manager Sq Ft + Director Sq Ft + Manager Sq Ft + Staff Sq Ft = Total Employee Sq Ft
 Senior Managers + Directors + Managers + Staff = Total # of Employees
 Lunchroom Area + Other Common Areas = Total Area Available to All Employees
 Total # of Employees x Total Area Available to All Employees = Total Common Area Sq Ft
 Total Employee Sq Ft + Total Common Area Sq Ft = Total Sq Ft Needed
Lesson 3
Monthly Transportation Expense
 Add Per Mile Costs  Gas Per Mile + Maintenance Per Mile + Depreciation Per Mile =
Mileage Costs
 Average Monthly Mileage x Mileage Costs = Total Mileage Costs
 # of Cars x Insurance Per Car = Total Insurance Costs
 Total Mileage Costs + Total Insurance Costs = Monthly Transportation Expense
Transportation Budget
 Turn fraction into decimal by dividing = % of Operating Expenses
 Operating Expense Budget x % of Operating Expense = Transportation Budget
CHAPTER 8
Lesson 1
Cost of Production
 Fixed Costs = Always stay the same ie RENT
 Variable Costs = Vary from month to month ie Water Bill
 Total Costs = Fixed Costs + Variable Costs
Lesson 2
Total Marketing Expenses
 Local TV + Magazines + Newspapers + Radio + City Special Events + Customer Happiness
Rep = Total Marketing Expense
 Total Marketing Expense / Total Sales = % of Sales for Marketing
Lesson 3
Total Value
 Inventory x Unit Cost = Total Value
 Add Total Value Column to get TOTALS
Average Cost of Inventory
 TOTALS / Total Inventory = Average Cost of Inventory
Value of Inventory
 Average Cost of Inventory x # of Units in Stock = Value of Inventory
Average Inventory
 Beginning Inventory + Ending Inventory = Total Inventory
 Total Inventory / 2 = Average Inventory
Lesson 4
Net Sales
 Sales – Less Sales Returns and Allowances = Net Sales
Merchandise Available for Sale
 Merchandise Inventory + Plus Purchases = Merchandise Available for Sale
Cost of Goods Sold
 Merchandise Available for Sale – Less Merchandise = Cost of Goods Sold
Gross Profit
 Net Sales – Cost of Goods Sold = Gross Profit
Net Income Before Tax
 Gross Profit – Total Operating Expenses = Net Income Before Tax
Change
 Base Year – Current Year = Change (If Base Yr is lower = Positive Change; Base Yr is higher
than current year = Negative Change- Negative Change goes in brackets)
Percent Change
 Change / Base Year = % Change
CHAPTER 9
Lesson 1
Total Monthly Premium
 Fire Theft Ins. + General Liability Ins. + Auto Ins. + Workers Compensation = Total Monthly
Premium
Total Annual Premium
 Total Monthly Premium x 12 Months = Total Annual Premium
Lesson 2
Annual Premium
 Cost of Coverage per $10,000 x Coverage = Total Coverage Amount
 Total Coverage Amount / $10,000 = Annual Premium
Total Premium for Car Insurance
 Bodily Injury Amount + Property Damage Amount + Comprehensive Deductible Amount +
Collision Deductible Amount + Medical Amount = Total Premium for 1 Vehicle
 Total Premium for 1 Vehicle x # of Vehicles = Total Premium for Car Insurance
**1/2% = .005 as a decimal
Lesson 3
Cost to Insurance Company
 Death Payment – Cash Value = Cost to Insurance Company
Actual Cost per $1,000 Coverage
 Cost to Insurance Company / $1,000 = Cost per $1,000 Coverage
 Annual Premium / Cost per $1,000 Coverage = Actual Cost per $1,000 Coverage
Total Premiums
 Monthly Premium x 12 Months = Annual Premium
 Annual Premium x # of Years of Policy Term = Total Premiums
CHAPTER 10
Lesson 1
Installation System Total Costs
 Collection Unit + Filter + Fan = Total Cost for 1 System
 Total Cost for 1 System x # of Systems = Total Installation System Cost
**.1% = .001 as a decimal
Lesson 2
Total Cost for Concrete
 Volume = Length x Width x Height / 2 (V=lwh/2) (Length, Width, Height must be like terms)
 Length x Width x Height = Volume
 Volume / 2 = Total Cubic Feet
 Total Cubic Feet / 27 Cubic Feet (27 Cubic Feet = 1 Cubic Yard) = Total Cubic Yards
 Total Cubic Yards  Round Up to a Whole #
 Total Cubic Yards as a Whole # x Cost of Concrete per Yard = Total Cost for Concrete
Total Cost of Handrails
 # of Posts x Height of Posts x Costs of Posts = Total Post Costs
 Number of Caps x Cost of Caps = Total Cap Costs
 Amount of Railing x Cost of Railing = Total Railing Costs
 # of Welder’s Hours x Cost Per Hour = Total Wages
 Total Post Costs + Total Cap Costs + Total Railing Costs + Total Wages = Total Handrail
Costs
Total Cost of Doors
 Height and Width must be like terms (must equal inches)
 Height (inches) x Width (inches) = Total Area
 Total Area x Cost per Sq Inch = Total Cost of Doors in Inches
 If cost is in feet Total Area / 144 (144 sq inches in 1 sq foot) = Total Area in Feet
 Total Area in Feet x Cost per Sq Foot = Total Cost of Doors in Feet
Lesson 3
Fuel Tax
 Miles Driven per State / MPG = Gallons
 Gallons x Cost per Gallon (Varies per State) = Total Fuel Tax per State
 Add Fuel Taxes for all Listed States
State Mileage Percent
 Annual State Mileage / Total Annual Mileage = State Mileage Percent
Fee Paid to State
 State Mileage Percent x Apportioned Plate Fee = Fee Paid to State
Lesson 4
CIF (Sum of the Cost of Goods + Insurance + Freight)
 Number of Items x Average Cost per Item = Total Cost of Items
 Total Cost of Items + Insurance + Freight = CIF
Tariff
 CIF x Tariff % = Tariff
Percent Increase
 Current Price of Item – Original Price of Item = Price Increase
 Price Increase / Base Price = Percent Increase
CHAPTER 11
Lesson 1
New Price
 Original Price + Percent Increase = New Price
Consumer Price INDEX
 Current Period Average Price / Base Period Average Price = Base Period Index
 Base Period Index x 100 = Consumer Price INDEX
Lesson 2
Average Yield per Acre
 Add 4 Years of Bushel Production = Total Production
 Total Production / 4 = Average Yield per Acre
Guaranteed Payment # of Bushels per Acre
 Average Yield per Acre x 50% = Guaranteed Payment # of Bushels per Acre
Total Insurance Payment
 Guaranteed Payment # of Bushels per Acre – Bushels per Acre Produced = Bushels per Acre
Paid by Insurance
 Market Price per Bushel x 60% = Insurance Payment per Bushel
 Insurance Payment per Bushel x Bushels per Acre Paid by Insurance = Insurance Payment per
Acre
 Insurance Payment per Acre x # of Acres = Total Insurance Payment
Increase per Dr. Office Visit
 Malpractice Insurance Premium Increase / # of Patients Seen per Year = Increase per Dr.
Office Visit
CHAPTER 12
Lesson 1
Gross Profit per Item
 Selling Price per Item – Cost per Item = Gross Profit per Item
Number of Sales
 Monthly Operating Expense / Gross Profit per Item = Number of Sales
Operating Costs Plus 10 % Growth
 Monthly Operating Expense + 10% = Operating Cost Plus 10% Growth
Lesson 2
Inquiries
 Divide Small # First to get a Percentage (%)
Employees Needed per Hour
 Visitors per Hour x Time with Each Visitor = Total Time (Minutes)
 Total Time / 60 Minutes = Employees Needed per Hour (Must be a whole #  Round Up)
Lesson 3
Advertising Cost per Sale
 Divide Fraction of Readers Who Buy = Decimal
 Decimal x Magazine Distribution = # of Items Sold
 Cost of Advertising / # of Items Sold = Advertising Cost per Sale
Amount of Profit
 Sales x Profit as a Percent of Sales = Amount of Profit
Maximum Amount for Effective Advertising
 Amount of Profit x Percent of Profit from New Sales = Maximum Amount for Effective
Advertising
Effective
 If Maximum Amount for Effective Advertising is MORE than Cost of Marketing Plan = Yes
 If Maximum Amount for Effective Advertising is LESS than Cost of Marketing Plan = No
CHAPTER 13
Lesson 1
Cost per Catalog
 Cost per Picture + Cost per Description = Cost of Picture & Description
 Total Cost of Picture & Description x # of Pictures & Descriptions = Total Cost of Pictures &
Descriptions
 Total Cost of Pictures & Descriptions + Designing Cost + Mailing Cost = Total Cost
 Total Cost / Catalogs Mailed = Cost per Catalog
Phone Charges
 Determine if the plan is PER MINUTE or PER FRACTION OF A MINUTE
 PER MINUTE  Round Up to Next Whole Minute
 PER FRACTION OF A MINUTE  Take Seconds / 60 Seconds = Minutes as a Fraction
 Phones x Cost per Phone = Phone Charges
 Average Call Time x Charge per Minute x # of Calls = Minute Charges
 Phone Charges + Minute Charges = Total Phone Bill
Lesson 2
Shipping Charges
 Total Cost of Purchase x Shipping % = Shipping Charge
 Compare Shipping Charge to Flat Rate  Higher Value is Correct Answer
Shipping
 Do NOT include Sundays!
Lesson 3
Total Cost of Processing and Handling
 Locate Box Size based on Dimensions Given in Problem = Cost for 10 Boxes
 Cost for 10 Boxes / 10 = Cost for 1 Box
 Packing Material Cost x Packing Material Sq Ft = Total Packing Material Cost
 Labor Time MUST = Hours
 Labor Time in Minutes / 60 Minutes = Hours
 Hours x Labor Wage = Total Labor Wage
 Cost for 1 Box + Total Packing Material Cost + Total Labor Wage = Total Cost of Handling
and Processing
Lesson 4
Volume
 Volume = Length x Width x Height (V=lwh) Length, Width & Height Must be Like Terms
 To Put Inches into Feet Inches / 12 Inches = Feet
Cost for 30 Days
 Volume x Cubic Feet per Day x 30 Days = Cost for 30 Days