Excel Modeling: Sports Feet Manufacturing
Planning and Implementing the Model
The first step in this modeling exercise was to plan for the variables that will later be used in the desired calculations. Annual fixed cost ($52,000), unit variable cost ($9), and unit selling price ($25) need to be utilized as inputs for calculations on outputs such as annual revenue, annual total cost, and annual profit / loss (). This data was then placed in a Spreadsheet model for the Profit / Loss analysis. Calculations an outputs used Excel calculations to calculate annual revenue (unit sales*quantity sold), annual variable cost (quantity sold*unit variable cost), annual total cost (annual revenue+annual fixed cost), and annual profit/loss (annual revenue-annual total cost). The model is shown below with the appropriate calculations as well as on the original spreadsheet.
Profit / Loss for Sports Feet Manufacturing
Inputs
Unit Sales Price
$25.00
Annual Fixed Cost
$52,000
Unit Variable Cost
$9.00
Quantity Made and Sold
Caculations and Outputs
Annual Revenue
$62,500.00
Annual Variable Cost
$22,500.00
Annual Fixed Cost
$52,000.00
Annual Total Cost
$74,500
Annual Profit (Loss)
($12,000.00)
Break Even Point
$3,250.00
The next step in the modeling of the Profit / Loss analysis was to repeat the calculation of the outputs, but this time...
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