John runs a small business selling custom-made furniture. Last year, his total revenue was
$250,000. This year, he plans to increase his revenue by 20%. He also wants to reduce his
expenses by 15%, from last year's expenses of $100,000. Additionally, John aims to allocate
25% of his profit (revenue minus expenses) towards marketing. Help John calculate his new
targets and allocations for the year.

110. What will be John's profit if he achieves his target revenue and new expenses?
A) $210,000
B) $215,000
C) $220,000
D) $225,000

111. How much money will John allocate towards marketing from his profit?
A) $52,500
B) $53,750
C) $54,000
D) $55,000 112. What is the percentage decrease in John's expenses from $100,000 to $85,000?
A) 13%
B) 14%
C) 15%
D) 16%
113. If John's profit margin is 25% of his revenue, what is his profit if his revenue is
$300,000?
A) $70,000
B) $75,000
C) $80,000
D) $85,000
114. If John's profit increased by 25% from last year's profit of $120,000, what is this year's
profit?
A) $145,000
B) $150,000
C) $155,000
D) $160,000
115. Last year, John spent 12% of his revenue on materials. If this year he plans to spend
10% less on materials, what percentage of his revenue will he spend on materials this year?
A) 2%
B) 12%
C) 8%
D) 11%

Let's go through each calculation step-by-step to find the correct answers for the questions.

### Step 1: Calculate John's target revenue and expenses.
- **Last Year's Revenue**: $250,000
- **Revenue Increase Target**: 20%
  
  \[
  \text{Target Revenue} = 250,000 \times (1 + 0.20) = 250,000 \times 1.20 = 300,000
  \]

- **Last Year's Expenses**: $100,000
- **Expense Reduction Target**: 15%
  
  \[
  \text{Target Expenses} = 100,000 \times (1 - 0.15) = 100,000 \times 0.85 = 85,000
  \]

### Step 2: Calculate the profit with the new revenue and expenses.
\[
\text{Profit} = \text{Target Revenue} - \text{Target Expenses} = 300,000 - 85,000 = 215,000
\]

So, the correct answer for **Question 110** is:
**B) $215,000**

### Step 3: Calculate the marketing allocation from the profit.
- **Marketing Allocation**: 25% of Profit
  
  \[
  \text{Marketing Allocation} = 215,000 \times 0.25 = 53,750
  \]

So, the correct answer for **Question 111** is:
**B) $53,750**

### Step 4: Calculate the percentage decrease in expenses.
- **Original Expenses**: $100,000
- **New Expenses**: $85,000
  
  \[
  \text{Percentage Decrease} = \left(\frac{100,000 - 85,000}{100,000}\right) \times 100 = \frac{15,000}{100,000} \times 100 = 15\%
  \]

So, the correct answer for **Question 112** is:
**C) 15%**

### Step 5: Calculate the profit margin scenario.
- **Revenue**: $300,000
- **Profit Margin**: 25%
  
  \[
  \text{Profit} = 300,000 \times 0.25 = 75,000
  \]

So, the correct answer for **Question 113** is:
**B) $75,000**

### Step 6: Calculate this year's profit with a 25% increase from last year's profit.
- **Last Year's Profit**: $120,000
- **Profit Increase**: 25%
  
  \[
  \text{This Year's Profit} = 120,000 \times (1 + 0.25) = 120,000 \times 1.25 = 150,000
  \]

So, the correct answer for **Question 114** is:
**B) $150,000**

### Step 7: Calculate the new percentage of revenue spent on materials.
- **Last Year's Material Cost as Percentage of Revenue**: 12%
- **Reduction in Material Costs**: 10%
  
  \[
  \text{New Percentage for Materials} = 12\% \times (1 - 0.10) = 12\% \times 0.90 = 10.8\%
  \]

Since the options don't include 10.8%, if the options round to the nearest whole number, the closest is **11%**.

So, the correct answer for **Question 115** is:
**D) 11%**

---

### Do you have any questions or need more details?

Here are some related questions:
1. What would be John's profit if his revenue increases by 30% and expenses decrease by 10%?
2. How would a 5% increase in marketing allocation affect the remaining profit?
3. What would be the impact on John's profit if expenses increased by 5% instead of decreasing?
4. How much would John save if he reduces his material costs by an additional 5%?
5. What percentage of his profit would marketing represent if his expenses were $90,000?

**Tip**: When dealing with percentage increases or decreases, always apply the percentage to the original value before proceeding to further calculations.

Learn how to calculate revenue increase, expense reduction, and profit allocation for John's custom furniture business. This detailed solution covers percentage calculations, profit margins, and expense reductions, providing practical insights for business owners.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation