Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Chesapeake Development Corporation (CDC) is a small real estate developer that builds one style of house. The selling price of the house is $460,000. The

Chesapeake Development Corporation (CDC) is a small real estate developer that builds one style of house. The selling price of the house is $460,000. The monthly fixed cost is $160,000. This includes salaries, office lease and supply costs. The variable cost for each house is $420,000. This includes cost of land, material, labor, and sales commission. This means, for example, if 2 houses are sold, the profit is (460,000 - 420,000)*2 - 160,000. a) Let x = sales volume (number of houses sold). Write the profit as a fuction of x. b) Build a model in Excel here to compute total monthly profit. If 10 houses are built and sold in a month, what is the profit for that month? c) Indicate what you would enter in GoalSeek to determine the break-even volume,i.e., in: Set Cell, To value, and Changing Cell. What is the break-even volume? d) With Excel's Data Table, build a table with profits for sales volume = 1, 2, ..., 12. Make a line chart of profit. Make sure correct sales volumes (1, 2, ..., 12) appear on the horizontal axis.

b) Give the profit for 10 houses (e.g., 123,456).

______

c) Give the break-even volume (e.g., 12).

______

c) What was your changing cell in GoalSeek? (e.g., B2)

______

d) For your Data Table, what Excel formula did you enter in cell C33?

______

d) In your Data Table, what Excel formula is in cell C34? To avoid getting stuck in the Data Table, after copying the formula in that cell, hit Escape to leave that cell.

_______

Data
Fixed Cost $160,000
Variable Cost Per Unit $420,000
Selling Price Per Unit $460,000
Variable
Sales Volume
Model
Total Revenue
Total Cost
Total Profit (Loss)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accountancy Analysis Of Financial Statements Analysis Of Financial Statements

Authors: M. Hanif, A. Mukherjee

1st Edition

1642879762, 9781642879766

More Books

Students also viewed these Accounting questions