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Alborz, a young entrepreneur based in northern Virginia, is exploring opportunities to expand his business and invest in a new electric bakery convection oven priced
Alborz, a young entrepreneur based in northern Virginia, is exploring opportunities to expand his business and invest in a new electric bakery convection oven priced at $ The baking cost, including electricity and labor, is estimated at $ per pound. Alborz sells different types of bread at his store and calculated that the average selling price of his products is approximately $ per pound. With a steady sales prediction, Alborz is confident that, on average, he sells pounds of bread each day if he works six days per week.
Alborz is negotiating with his brother to secure a financial arrangement covering the oven's acquisition cost, so he needs to know how many days it takes to reach the breakeven point and establish a clear timeline for the repayment of the borrowed fund. It's worth noting that the financial arrangement with his brother involves zero interest on the borrowed amount.
Answer the following questions about this problem.
Question In Excel, create a model of the Alborz problem that explicitly shows all the quantity values in this problem. Assign cells to represent the fixed cost, the variable cost per pound, and the selling price per pound. Also, assign cells to represent the selling amount in pounds total cost, total revenue, and net profit. Finally, assign cells to represent the selling time in days and selling time in wecks.
Ensure that constant numbers all given quantity values appear only in specified input cells and are not "hard coded" in formulas.
Consider the following points in your worksheet:
a Organization, formatting, clarity, and correctness all count. You need to clearly indicate where in the spreadsheet the user should provide values for fixed costs, variable costs,
Each in erase, ring alave so pid are is own el in the parameters scotion of your
spreadsheet. Use formatting that clarifies that the user may change the values in these cells.
Next, proceed with the following steps in your worksheet.
c Format all dollar amounts as Currency.
d Name this sheet "Model."
e In a cell, write "Breakeven Point." Then, on the right of this cell, write a formula to calculate the breakeven point of this problem on your spreadsheet.
f Use goalseek to find the exact breakeven point in the "selling amount" cell and compare the result of your formula in part e to ensure that your answer is correct.
g Use goalseek to find the "selling amount" that makes a $ profit.
h Recall that Alborz is confident in his daily sales of an average of pounds of bread. In a separate cell, calculate the number of selling days required to achieve a $ profit and repay his brother's loan.
i Fill out the table on the next page. How much is the fixed cost?
How much is the variable cost or marginal cost per pound?
Write the total cost function associated with selling x pounds.
Cx
How much is the selling price or marginal revenue?
Write the revenue function associated with selling x pounds.
Rx
Write the profit function associated with selling x pounds.
Px
What is the profit of selling pounds of bread?
P
Calculate the breakeven point.
pounds.
Calculate the baking amount to make $
as profit.
pounds.
How many days are required to repay the brother's loan?
days.
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