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Susan intends to sell cups of Milo at the local supplementary drink developed to provide active people with key vitamins. ANNEXURE A shows the advertisement from her local store where she intends to buy stock.

Use ANNEXURE A to answer the questions that follow:

1.1 Determine the unit price when purchasing Milo option 2.

1.2 Determine the total cost of 6 liters of milk.

1.3 Explain the meaning of the term "cost price."

1.4 Susan decided to exclude the cost of water when calculating the cost price of Milo.

TABLE 1 below shows how Susan calculated the cost price of ONE cup.

TABLE 1:
\begin{tabular}{|l|c|c|c|}
\hline
\textbf{QUANTITY BOUGHT} & \textbf{COST OF INGREDIENTS} & \textbf{AMOUNT USED FOR ONE CUP} & \textbf{COST PER CUP OF MILO} \\
\hline
1 kg Milo & [tex]$R 97.95$[/tex] & [tex]$0.04$[/tex] kg & A \\
\hline
\end{tabular}



Answer :

GinnyAnswer
Certainly! Let's go through each part of the problem step by step.

1.1 Determine the unit price when purchasing Milo option 2.

To find the unit price of Milo for option 2, we need to know the cost of the product and its weight. According to the information:

- Cost of 1 kg Milo (option 2) = R 97.95
- Weight = 1 kg

The unit price is calculated as:
[tex]\[ \text{Unit Price} = \frac{\text{Cost}}{\text{Weight}} \][/tex]

Here,
[tex]\[ \text{Unit Price} = \frac{R 97.95}{1 \, \text{kg}} = R 97.95 \, \text{per kg} \][/tex]

Therefore, the unit price when purchasing Milo option 2 is R 97.95 per kg.

1.2 Determine the total cost of 6 liters of milk.

Given:
- Cost per liter of milk = R 12
- Amount of milk needed = 6 liters

The total cost of milk is calculated as:
[tex]\[ \text{Total Cost} = \text{Cost per liter} \times \text{Amount of milk} \][/tex]

Here,
[tex]\[ \text{Total Cost} = R 12 \times 6 \, \text{liters} = R 72 \][/tex]

Therefore, the total cost of 6 liters of milk is R 72.

1.3 Explain the meaning of the word "cost price."

The cost price refers to the original price of an item or the price at which it was purchased by a seller. It is the amount paid to acquire or produce a product before any profit is added. The cost price is important as it determines the base cost for a seller before any markup or selling price is calculated.

1.4 Calculate the cost per cup of Milo based on the given table.

Using the information provided in the table:
- Quantity bought = 1 kg of Milo
- Cost of 1 kg Milo = R 97.95
- Amount of Milo used per cup = 0.04 kg

To find the cost per cup, we need to determine how much 0.04 kg of Milo costs. The cost per cup can be calculated as:
[tex]\[ \text{Cost per cup} = \left( \frac{\text{Cost of 1 kg Milo}}{\text{Quantity bought}} \right) \times \text{Amount used per cup} \][/tex]

Substituting the given values:
[tex]\[ \text{Cost per cup} = \left( \frac{R 97.95}{1 \, \text{kg}} \right) \times 0.04 \, \text{kg} \][/tex]

[tex]\[ \text{Cost per cup} = R 97.95 \times 0.04 = R 3.918 \][/tex]

Therefore, the cost per cup of Milo is R 3.918.

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