Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand is $50.00. Her best guess is that she can sell 300 cups per week at $0.50 per cup. The variable cost of producing a cup oflemonade is $0.20.a. Given her other assumptions, what level of sales volume will enable Julie to break even?b. Given her other assumptions, discuss how a change in sales volume affects profit.c. Given her other assumptions, discuss how a change in sales volume and variable cost jointly affect profit.d. Use Excel’s Formula Auditing tools to show which cells in your spreadsheet affect profit directly.
Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand is $50.00. Her best guess is that she can sell 300 cups per week at $0.50 per cup. The variable cost of producing a cup oflemonade is $0.20.a. Given her other assumptions, what level of sales volume will enable Julie to break even?b. Given her other assumptions, discuss how a change in sales volume affects profit.c. Given her other assumptions, discuss how a change in sales volume and variable cost jointly affect profit.d. Use Excel’s Formula Auditing tools to show which cells in your spreadsheet affect profit directly.
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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Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand is $50.00. Her best guess is that she can sell 300 cups per week at $0.50 per cup. The variable cost of producing a cup of
lemonade is $0.20.
a. Given her other assumptions, what level of sales volume will enable Julie to break even?
b. Given her other assumptions, discuss how a change in sales volume affects profit.
c. Given her other assumptions, discuss how a change in sales volume and variable cost jointly affect profit.
d. Use Excel’s Formula Auditing tools to show which cells in your spreadsheet affect profit directly.
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