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In the Ponderosa Development Corp. (PDC) example, if the land for each house costs $75,000 and lumber, supplies, and other materials run another $34,000 per
In the Ponderosa Development Corp. (PDC) example, if the land for each house costs $75,000 and lumber, supplies, and other materials run another $34,000 per house. PDC leases office space for $3,500 per month and their monthly salaries total to 38,500. Assume that total labor costs are approximately $14,000 per house and the one salesperson of PDC is paid a commission of $3,000 on the sale of each house. The cost of office supplies, utilities, and leased equipment runs another $5,500 per month. The selling price of the house is $145,000. Please create an Excel sheet for the Break-Even Analysis (BEA); answer the following questions: (1) Identify all monthly costs and revenue. (2) Write the monthly cost function c (x), revenue function r (x), and profit function p(x). (3) What is the breakeven point (BEP) for monthly sales of the houses based on the cost, revenue and profit functions specified in (2)Show calculations. (4) What is the monthly profit if 11 houses per month are built and sold? Show calculations. (5) What is the monthly profit if the total variable cost per house decreases by 10%, and PDC built and sold 13 houses per month? Show calculations
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