An automated car wash called Jet Express outside a large Texas city on the beltway is deciding whether to build and install one dedicated vehicle wash line or have two parallel wash lines. There are no other car washes at this intersection and there will be none because all the land is developed. The second line allow for some economies of scale in total cost. The monthly fixed cost of one wash line is $13,000 per month or $156,000 per year. This includes the mortgage payment, taxes on the building, and wash equipment. The variable cost for this single line is $15 per vehicle. The fixed cost for two wash lines is $25,500 per month or $306,000 per year, and the variable cost to operate two lines is $11 per vehicle because some wash crews can work both lines. The price of the average interior and exterior car wash is $27. Use the Excel template Break-Even in MindTap to answer the following questions: a. What is the break-even quantity for one and two automated wash line? Round your answers to the nearest whole number.

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter9: Systems Of Equations And Inequalities
Section: Chapter Questions
Problem 13T
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Annual forecasts of demand for this site ranges from 13,000 to 26,000 per year. Calculate the net profit/loss of the site in each of the following situations. Round your answers to the nearest dollar. If your answer is zero, enter "0". Use a minus sign to enter loss, if any.

# Spreadsheet Problem: Jet Express Car Wash

**Context:**
An automated car wash called Jet Express, located outside a large Texas city on the beltway, is deciding whether to build and install one or two dedicated vehicle wash lines. The decision focuses on optimizing costs due to land constraints and demand forecasts.

**Fixed and Variable Costs:**
- **One Wash Line:**
  - Monthly Fixed Cost: $13,000
  - Annual Fixed Cost: $156,000
  - Variable Cost per Vehicle: $15

- **Two Wash Lines:**
  - Monthly Fixed Cost: $25,500
  - Annual Fixed Cost: $306,000
  - Variable Cost per Vehicle: $11

**Price:**
- Interior and Exterior Car Wash: $27

**Calculations:**
a. **Break-even Quantity:**
   - **For one wash line:** 13,000 vehicles per year
   - **For two wash lines:** 19,125 vehicles per year

b. **Annual Demand Forecasts and Net Profit/Loss Calculations:**
Demand forecasts range from 13,000 to 26,000 vehicles per year. Calculate net profit/loss for each scenario and round answers to the nearest dollar.

**Table for Profit/Loss Calculation:**

| Annual Demand | One Wash Line Profit/Loss | Two Wash Lines Profit/Loss |
|---|---|---|
| 13,000 vehicles | $ [Input required] | $ [Input required] |
| 19,500 vehicles | $ [Input required] | $ [Input required] |
| 26,000 vehicles | $ [Input required] | $ [Input required] |

**Instructions:**
- Use the Excel template *Break-Even in MindTap* to calculate profits or losses.
- If your answer is zero, enter "0." Use a minus sign for losses.

This exercise helps in understanding cost structures, the importance of break-even analysis, and decision-making based on economic forecasts.

**Note:** Calculated values for profit/loss need manual input based on respective scenarios using the provided formula.
Transcribed Image Text:# Spreadsheet Problem: Jet Express Car Wash **Context:** An automated car wash called Jet Express, located outside a large Texas city on the beltway, is deciding whether to build and install one or two dedicated vehicle wash lines. The decision focuses on optimizing costs due to land constraints and demand forecasts. **Fixed and Variable Costs:** - **One Wash Line:** - Monthly Fixed Cost: $13,000 - Annual Fixed Cost: $156,000 - Variable Cost per Vehicle: $15 - **Two Wash Lines:** - Monthly Fixed Cost: $25,500 - Annual Fixed Cost: $306,000 - Variable Cost per Vehicle: $11 **Price:** - Interior and Exterior Car Wash: $27 **Calculations:** a. **Break-even Quantity:** - **For one wash line:** 13,000 vehicles per year - **For two wash lines:** 19,125 vehicles per year b. **Annual Demand Forecasts and Net Profit/Loss Calculations:** Demand forecasts range from 13,000 to 26,000 vehicles per year. Calculate net profit/loss for each scenario and round answers to the nearest dollar. **Table for Profit/Loss Calculation:** | Annual Demand | One Wash Line Profit/Loss | Two Wash Lines Profit/Loss | |---|---|---| | 13,000 vehicles | $ [Input required] | $ [Input required] | | 19,500 vehicles | $ [Input required] | $ [Input required] | | 26,000 vehicles | $ [Input required] | $ [Input required] | **Instructions:** - Use the Excel template *Break-Even in MindTap* to calculate profits or losses. - If your answer is zero, enter "0." Use a minus sign for losses. This exercise helps in understanding cost structures, the importance of break-even analysis, and decision-making based on economic forecasts. **Note:** Calculated values for profit/loss need manual input based on respective scenarios using the provided formula.
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