Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost =$15,000 Material cost per
Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost =$15,000 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? to 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started