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Break-Even Analysis Enter data only in yellow cells. Profitability Analysis Outsourcing Decision Technology Choice Decision Quantity 10,000 Quantity 12,000 Quantity 11,000 Cost Produce In-House Option A Fixed cost Unit cost $100,000.00 $12.00 Fixed cost Unit cost $20.00 Fixed cost Unit cost $200,000.00 $18.60 Outsource Option B Revenue Unit revenue $20.00 $220,000.00 $200,000.00 Net Profit Profit or Loss -$20,000.00 Loss Fixed cost Unit cost $35.00 Fixed cost Unit cost $100,000.00 $21.00 Total Cost Total Revenue Total In-House Production Cost Total Outsourced Cost Cost difference (In-House - Outsourced) $70,000.00 Economical Decision Outsource Total Cost Option A Total Cost Option B $404,600.00 $331,000.00 Cost difference (Option A - Option B) Economical Decision $73,600.00 Option B

Break-Even Analysis Enter data only in yellow cells. Profitability Analysis Outsourcing Decision Technology Choice Decision Quantity 10,000 Quantity 12,000 Quantity 11,000 Cost Produce In-House Option A Fixed cost Unit cost $100,000.00 $12.00 Fixed cost Unit cost $20.00 Fixed cost Unit cost $200,000.00 $18.60 Outsource Option B Revenue Unit revenue $20.00 $220,000.00 $200,000.00 Net Profit Profit or Loss -$20,000.00 Loss Fixed cost Unit cost $35.00 Fixed cost Unit cost $100,000.00 $21.00 Total Cost Total Revenue Total In-House Production Cost Total Outsourced Cost Cost difference (In-House - Outsourced) $70,000.00 Economical Decision Outsource Total Cost Option A Total Cost Option B $404,600.00 $331,000.00 Cost difference (Option A - Option B) Economical Decision $73,600.00 Option B

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A university currently has a recycling program for paper waste. The fixed cost of running this program is $15,000 per year. The variable cost for picking up and disposing of each ton of recyclable paper is $40. If the work is outsourced to a recycling company, the cost would be $65 per ton.

 

  1. If the forecasted demand is 750 tons, what should the university do? Use the Break-Even Excel template to find your answer.

 

  1. Find the break-even point using the Excel Goal Seek tool.
Break-Even Analysis Enter data only in yellow cells. Profitability Analysis Outsourcing Decision Technology Choice Decision Quantity 10,000 Quantity 12,000 Quantity 11,000 Cost Produce In-House Option A Fixed cost Unit cost $100,000.00 $12.00 Fixed cost Unit cost $20.00 Fixed cost Unit cost $200,000.00 $18.60 Outsource Option B Revenue Unit revenue $20.00 $220,000.00 $200,000.00 Net Profit Profit or Loss -$20,000.00 Loss Fixed cost Unit cost $35.00 Fixed cost Unit cost $100,000.00 $21.00 Total Cost Total Revenue Total In-House Production Cost Total Outsourced Cost Cost difference (In-House - Outsourced) $70,000.00 Economical Decision Outsource Total Cost Option A Total Cost Option B $404,600.00 $331,000.00 Cost difference (Option A - Option B) Economical Decision $73,600.00 Option B
Transcribed Image Text:Break-Even Analysis Enter data only in yellow cells. Profitability Analysis Outsourcing Decision Technology Choice Decision Quantity 10,000 Quantity 12,000 Quantity 11,000 Cost Produce In-House Option A Fixed cost Unit cost $100,000.00 $12.00 Fixed cost Unit cost $20.00 Fixed cost Unit cost $200,000.00 $18.60 Outsource Option B Revenue Unit revenue $20.00 $220,000.00 $200,000.00 Net Profit Profit or Loss -$20,000.00 Loss Fixed cost Unit cost $35.00 Fixed cost Unit cost $100,000.00 $21.00 Total Cost Total Revenue Total In-House Production Cost Total Outsourced Cost Cost difference (In-House - Outsourced) $70,000.00 Economical Decision Outsource Total Cost Option A Total Cost Option B $404,600.00 $331,000.00 Cost difference (Option A - Option B) Economical Decision $73,600.00 Option B
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