Question

how do I figure this out using excel?

Problem 10-02 Algo (What If Analysis) Question 5 of 22 Check My Work eBook Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost $7,000 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 from 5,000 to 50,000 in increments of 5,000. In which interval of production volume does breakeven occur? 20000 to 25000 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

Answer 1

Fixed Cost, F = 7000

Variable cost, v = 0.15 + 0.10 = 0.25

Selling Price, s = 0.65

Let x be the production volume

Profit = Total Revenue - Cost Price

= s*x - ( F + v*x)

= 0.65x - 7000 - 0.25x

= 0.40x - 7000

Now puttinx x from 5000 to 50000 with 5000 difference

X ( Production Volume )	Profit
5000	-5000
10000	-3000
15000	-1000
20000	1000
25000	3000
30000	5000
35000	7000
40000	9000
45000	11000
50000	13000

Going from negative for x = 15000 to x = 20000

a) 15000 to 20000

b) Using Goal seek

Exact Break Even Point = 17,500

b) 17500

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