The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $100,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $36. Build a spreadsheet model in Excel to calculate the profit/loss for a given demand.
(1) Use a data table to vary demand from 3,200 to 3,700 in increments of 20 to test the sensitivity of profit to demand. Breakeven occurs where profit goes from a negative to a positive value, that is, breakeven is where total revenue = total cost yielding a profit of zero. In which interval of demand does breakeven occur? (2) Use Goal Seek to answer the following question. With a price of $36, what is the demand that the publisher must have to break even?
Solve this model on a spreadsheet (see Quiz 1.Eastman Temnlate.xlsx). You need to submit your Excel file* online. This is the menu path: Our class Website >
Assignment >
Quiz 1. Please name your file with your last name. Please review your Excel file before submitting it to ensure everything is in order. p.s. maximum attempts=3**,- Score attempts using=Last Graded Attempt * Create a spreadsheet in Excel that has your data, Excel formulas, solution procedures, and answers (to make your answers stand out from other sections, use different colors).
** Students can submit their work multiple times (i.e. 3), if needed, before the deadline.
