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Halsey Corporation manufactures products that have variable costs of $60 per unit. Its fixed cost amounts to $360,000. It sells the products for $90 each.
Halsey Corporation manufactures products that have variable costs of $60 per unit. Its fixed cost amounts to $360,000. It sells the products for $90 each. Conduct a sensitivity analysis on an excel file, on the first sheet manually, (fixed cost and variable cost being on the vertical axis and sales volume being on the horizontal axis) considering: - 4 levels of fixed cost: 300,000-360,000-430,000-500,000. - 5 levels of variable cost: 50-55-60-65-70 - 5 levels of sales volume: 8,000-10,000-12,000-14,000-16,000. Then conduct the same sensitivity analysis, on the second sheet using what if analysis, (sales volume being on the horizontal axis and variable cost being on the vertical axis) considering: - Fixed cost =360,000 - 21 levels of variable cost: starting from 50 till 70 - 5 levels of sales volume: starting from 8,000 and goes till 20,000 increasing 1,000 at each step. Comment on your findings, by comparing fixed cost, variable cost, and sales volume figures: i. What are the break-even points you observe on the manual sensitivity analysis table? ii. What can company do to inrease its profitability
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