Determine the profitability of the order

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Reference no: EM131981039

Assume Smith Workstations charges $350 to build a standard cubicle for their clients. An order has come in from an insurance carrier to build out 150 cubicles. Build a model in Excel for the following scenarios:

1. Determine the profitability of the order using the following information: Labor cost is $10.00 per hour per person, and it takes 2 labor hours to build a cubicle. The cost for materials is $250 for each cubicle. How much profit or loss will Smith Workstations make?

2. Assume the same information as in the first scenario, but assume that productivity increases from 2 hours to 1.75 hours, and the cost for materials is $225. How much profit or loss will Smith Workstations make?

3. Assume the same information as the second scenario, but the order increases from 150 cubicles to 225 cubicles. How much profit or loss will Smith Workstations make?

4. Assume the same information as the third scenario, but the price drops to $325. How much profit or loss will Smith Workstations make?

The model should contain the following sections: Description, Inputs, Formula/Outputs.

Reference no: EM131981039

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