Discuss how a change in sales volume affects profit

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Reference no: EM133693192

Homework: Introduction to Business Analytics

Overview

Each application homework is a comprehensive experiential learning experience and is directly related to business analysis and decision-making. The student will complete four application homework.

Instructions

Each homework must be a minimum of 3 to 5 pages of original discussion and analysis, not counting the title page, reference page, figures, tables, and appendixes. Each application homework must be supported by at least 3 scholarly references, in APA format.

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.

1. Given her other assumptions, what level of sales volume will enable Julie to break even?

2. Given her other assumptions, discuss how a change in sales volume affects profit.

3. Given her other assumptions, discuss how a change in sales volume and variable cost jointly affect profit.

4. Use Excel's Formula Auditing tools to show which cells in your spreadsheet affect profit directly.

Reference no: EM133693192

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