A company makes electronic components and has estimated the following for the new design of one of its products:

Fixed costs = $10,000

Material cost per unit = $0.15

Labor cost per unit = $0.10

Revenue per unit = $0.65

Note that fixed costs are incurred regardless of the amount produced. Per unit material and labor costs together make up the variable cost per unit. Assuming this company sells all that it produces, profit is calculated by subtracting the fixed costs and total variable costs from total revenue.

Construct an appropriate Excel file guided by the questions below. Then, answer the questions below either in a Word document or within yourcompleted Excel file. Acompleted Excel file must be attached to receive credit for this question.

a. What is the mathematical model for calculating profit?

b. Implement this model in Excel using the principles of good spreadsheet design. If the company makes 12,000 units of the product, what is the resulting profit?

c. Use Goal Seek to find the breakeven point. How many units must be sold for the company to breakeven?