Mathematical Literacy control test 9 February 2025 QUESTION 4 Martha decides to start a new business venture and bake chocolate muffins. She sells the muffins for R25,00 each. Her only fixed cost is paying her 16 year old niece R500 a month to maintain the business social page. She calculated that the variable cost per muffin is R15,00. 4.1 Define the term fixed cost in the given context. (2) 4.2 Give any ONE variable cost for the Muffins business venture. (2) 4.3 Martha calculated that when she bakes 50 muffins her income will be equal to her expenses. What will this point be called on a graph representing her income and (2) expenses? 4.4 Calculate the amount of profit that Martha will make if she sells 200 muffins. TOTAL:

Below are the answers: 4.1 Fixed cost is a cost that does not change with the level of production. In this context, it is the monthly payment of R500 to Martha’s niece, which must be paid regardless of the number of muffins produced or sold. 4.2 One example of a variable cost is the cost of the ingredients (such as chocolate, flour, eggs, etc.) needed to make each muffin since these costs vary with the number of muffins baked. 4.3 The point where her income is equal to her expenses is called the break-even point. 4.4 To calculate the profit when selling 200 muffins, we have:   Sales revenue = 200 muffins × R25.00 = R5000   Total variable cost = 200 muffins × R15.00 = R3000   Fixed cost = R500 Thus, Profit = Sales revenue – (Variable cost + Fixed cost)   Profit = R5000 – (R3000 + R500) = R5000 – R3500 = R1500 So, Martha’s profit for 200 muffins is R1500.