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eBook Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost = $19,000 Material cost per unit $0.15 Labor cost per unit$0.10 Revenue per unit = $0.65 Production Volume 12,000 Per-unit material and labor cost together make up the variable cost per unit. Assuming that Cox Electric sells all it produces, build a spreadsheet model that calculates the profit by subtracting the fixed cost and total variable cost from total revenue, and answer the following questions. (a) Construct a one-way data table with production volume as the column input and profit as the output. Breakeven occurs when profit goes from a negative to a positive value; that is, breakeven is when total revenue = total cost, yielding a profit of zero vary production volume ron 5,000 to 50,000 in increments of 5,000 breakeven occur? n hich inter a of production volume does to units b) Use Goal Seek to find the exact breakeven point Assign Set cell: equal to the location of profit To value: = 0 and By changing cell: equal to the location of the production volume in your model.

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Answer #1
a) Data table showing BEP:
Production Variable Cost (*0.25) Fixed Cost Total Cost Revenue (*0.65)
5000 1250 19000 20250 3250
10000 2500 19000 21500 6500
15000 3750 19000 22750 9750
20000 5000 19000 24000 13000
25000 6250 19000 25250 16250
30000 7500 19000 26500 19500
35000 8750 19000 27750 22750
40000 10000 19000 29000 26000
45000 11250 19000 30250 29250
50000 12500 19000 31500 32500
Production volume interval where breakeven occur is 45000 units to 50000 units.
b) Goal Seek for the exact Breakeven point :
Production Variable Cost (*0.25) Fixed Cost Total Cost Revenue (*0.65)
45000 11250 19000 30250 29250
45500 11375 19000 30375 29575
46000 11500 19000 30500 29900
46500 11625 19000 30625 30225
47000 11750 19000 30750 30550
47500 11875 19000 30875 30875 BREAK EVEN POINT
48000 12000 19000 31000 31200
48500 12125 19000 31125 31525
49000 12250 19000 31250 31850
49500 12375 19000 31375 32175
50000 12500 19000 31500 32500
BREAK EVEN PRODUCTION QUANTITY IS 47500 units.
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