Question

Lab 3: Consider This: Your turn

Apply your creative thinking and problem-solving skills to design and implement a solution.

Determine the Break – Even Point

Part 1: You have been hired by Alison Chang, owner of a small start- up company, to create a data table that analyzes the break-even point for a new product she is developing. She would like you to analyze the break-even point for prices ranging from $12.99 to $17.99 per unit, in $0.50 increments. You can calculate the number of units she must sell to break even (break-even point) if you know the fixed expenses, the price per unit, and the expense (cost) per unit. The following formula determines the break-even point.

Break-Even Point = Fixed Expenses / (Price per Unit – Expense per Unit)

Assume Fixed Expenses = $7,000; Price per Unit =$14.99; and Expense per Unit = $8.00.

Use the concepts and techniques presented in this module to determine the break-even point and then create the data table. Use the Price per Unit as the input cell and the break-even value as the result. Protect the worksheet so that only cells with data can be selected. Submit your assignment in the format specified by your instructor.

You can calculate additional break-even points by using a two-way table and varying Fixed Expenses or Expense per Unit in addition to Price per Unit. Which of the following provides the owner with a wider range of break-even points: varying Fixed Expenses between $6500 and $7000 in increment of $250 or varying Expense per Unit between $7.60 and $8.00 in increments of $0.20?

Part 2: You made several decisions while creating the worksheet for this assignment. How did you set up the worksheet? How did you decide how to create the data table? What additional break-even points did you calculate, and why?

Answer 1

break even point (price change) 13.99 14.49 15.99 16.49 17.99 12.99 7000 13.49 7000 14.99 7000 15.49 7000 17.49 7000 7000 7000 7000 7000 price per unit fixed expenses expense per unit break even point in units) 16.99 7000 8 7000 8 8 8 8 8 8 8 8 8 8 1402.806 1275.046 1168.614 1078.582 1001.431 934.5794 876.0951 824.4994 778.6429 737.6185 700.7007 break even point (fixed expense change) break even point calculated using (fixed expenses/ (price per unit - expense per unit) price per unit fixed expenses expense per unit break even point in units) 12.99 12.99 12.99 6500 6750 7000 8 8 8 1302.605 1352.705 1402.806 break even point (expense per unit change) 12.99 12.99 12.99 6500 7.6 6500 price per unit fixed expenses expense per unit break even point (in units) 6500 7.8 8 1205.937 1252.408 1302.605

to study the effect of change in (price, fixed expenses and expense per unit) on break even uints, we studied different break even point using sensitivity analysis

thanks

please upvote if it helped

comment for doubts