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Amaya is a gardener - OCR - GCSE Business - Question 11 - 2022 - Paper 1

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Amaya is a gardener. She charges £15 per hour. Her fixed costs are £18000 per annum. Her variable costs are £2 per hour. How many hours of gardening will Amaya need... show full transcript

Worked Solution & Example Answer:Amaya is a gardener - OCR - GCSE Business - Question 11 - 2022 - Paper 1

Step 1

Calculate Total Costs

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Answer

To determine how many hours of gardening Amaya needs to do to start making a profit, we first need to calculate her total costs, which consist of fixed costs and variable costs per hour.

Let:

  • Fixed Costs (FC) = £18000
  • Variable Costs per hour (VC) = £2
  • Number of hours (h)

The Total Cost (TC) can be defined as:

TC=FC+VC×hTC = FC + VC \times h

Thus,

TC=18000+2hTC = 18000 + 2h

Step 2

Calculate Total Revenue

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Answer

Next, we calculate the Total Revenue (TR), which is the income Amaya generates from her gardening work:

Let the price charged per hour be (P) = £15.

The Total Revenue can be expressed as:

TR=P×h=15hTR = P \times h = 15h

Step 3

Set Up Profit Equation

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To start making a profit, Total Revenue must be greater than Total Costs:

TR>TCTR > TC

Substituting the equations we derived gives:

15h>18000+2h15h > 18000 + 2h

Step 4

Solve for Hours (h)

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Answer

Rearranging the inequality:

15h2h>1800015h - 2h > 18000

13h>1800013h > 18000

Now, divide both sides by 13:

h>1800013h > \frac{18000}{13}

Calculating this gives:

h>1384.61538461538h > 1384.61538461538

Since Amaya cannot work a fraction of an hour, we round up to the nearest whole number:

Thus, Amaya would need to work at least 1385 hours to start making a profit.

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