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Word Problem Assignment: Cupcake Business
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Business:
Ann and Bill would like to start a bakery that specializes in cupcakes. This is a hot new trend and they would like to get in on it. They have convinced their families to let them borrow $ 60,000 and they were able to secure a bank loan for another $75,000. They also have $30,000 of their own money that they will be using.
1) Budget:
a) What integer would represent their total initial budget? 60,000 + 75,000 + 30,000 = 165,000

b) Thirty-five percent of this budget will be used for renting space and paying the utilities. Another twenty-five percent will go toward buying bakery equipment and finally another five percent will be used to purchase initial ingredients. Write an algebraic expression that indicates how much money will be spent on renting space, utilities, equipment and supplies. 0.3560,000+75,000+30,000+0.2560,000+75,000+30,000+0.0560,000+75,000+30,000=

c) Write an algebraic equation to show how the total budget is being used. Use x for the remaining funds. Next solve this equation for the remaining funds. 0.35 * 165,000+0.25 * 165,000+0.05 *165,000=x

2) Baking: 0.25 x 165,000 = 41,250 a) You have decided to make two sizes of cupcakes, regular and mini. The regular pans hold 12 cupcakes and the mini pans hold 18. If your oven will hold 6 regular pans and 4 mini pans at the same time, how many cupcakes will you be able to bake at one time? 6 x 12 + 4 x 18 = 144

b) If you charge $2.60 for a regular cupcake and $1.45 for a mini, how much would you bring in if you sold all of the cupcakes that came out of the oven in part a? 2.60 x 72 + 1.45 x 72 = 291.60

c) In one day you sold a total of $1587.60. If $1170.00 of that is from regular cupcakes, how many mini cupcakes did you sell? 1587.60 – 1170.00 = 417.60

3) Profit: a) Suppose your revenue for one day is $1587.60. If your cost for the day includes $475 for rent, utilities and equipment, $670 for labor and $ 295 for supplies, what would the profit for the day be? (Note: Profit = Revenue – Cost)
1587.60 – 475 – 670 – 295 = 147.60

b) Is this an efficiently run business? If your answer is no, what suggestions would you make to Bill and Ann so that they could be more profitable as a cupcake bakery. No, this is not an efficiently run business. Their cost is way too high compared to the profit they are actually bringing in on a daily basis. I would suggest to them to either up there prices per cup cake or find a way to cut some of their cost.

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