Microsoft Office Tutorials and References
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Review Questions
FIGURE 34.14 Activating the Solver
1. On the Review sheet in the Chapter 34
le, you will
nd an example that
was used before. The example has a net pro
tof
$4,000, as you can see below.
The formulas are shown on the right side of the
gure.
As you want to break even, use the Goal Seek
rst to
nd out:
a. What is the selling price that will make this manufacturing proposition break
even?
b. At what Unit Cost do you break even?
c. How many units do you have to sell in order to break even?
d. What should the monthly fixed expenses be reduced to in order to break
even?
2. Working out all these answers, it becomes obvious that these goals when taken
individually cannot be reached. You may have to change two or more of these
inputs:
a. If the highest price the product can be sold for is $11.25 (not $11.57), how
much would the optimal unit cost and be? Use the Solver to find out.
b. If the maximum price you can charge is $11.15, the unit cost cannot be
reduced below $7.80, and monthly expenses can only be reduced by $500,
how many units do you have to sell in order to break even?
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