Introduction to Management Science 12th Edition Chapter 1, Problem 2P ***NEED HE

Question

Introduction to Management Science 12th Edition

Chapter 1, Problem 2P

***NEED HELP WITH SOLVING THIS USING EXCEL'S SOLVER TOOL - PLEASE PROVIDE SCREEN SHOTS ON HOW TO SETUP AND WHAT TO ENTER IN APPROPRIATE CELLS****

Gobblecakes is a bakery that specializes in cupcakes. The annual fixed cost to make cupcakes is $18,000. The variable cost including ingredients and labor to make a cupcake is $0.90. The bakery sells cupcakes for $3.20 a piece.

A) If the bakery sells 12,000 cupcakes annually, determine the total cost, total revenue, and profit.

B) How many cupcakes will the bakery need to sell in order to break even?

Explanation / Answer

Sale Price per unit (a) $3.20 Variable Cost per unit (b) $0.90 Contribution per unit (c = a-b) $2.30 # Units (d) 12000 Total Contribution (e = d*c) $27,600.00 Fixed Costs (f) $18,000.00 Profit (g=e-f) $9,600.00 Total Revenue (h = a*d) $38,400.00 Total Variable Cost (i = c*d) $10,800.00 Total Cost (j = i + f) $28,800.00 Breakeven Point (f/c) 7827 (Fixed Cost/Contribution per unit)

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