7 - Q2b

Cox Electric makes electronic components and has estimated the following for a new design of one of its products:

Fixed Cost = $9,000

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.

(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: __________________