Anna Operates a Consignment Shop Where She Sells Cloths for Women

Essay

Anna operates a consignment shop where she sells cloths for women and children. The average consignments sold per month is 1000. The average material cost and the selling price of each consignment is $8 and $20, respectively.
The monthly fixed cost to run this business is given below:
Rental cost: $750
Utilities: $150
Advertising: $35
Insurance: $100
Labor cost: $4000 a. Using the spreadsheet model, construct a one-way data table with number of consignments sold per month as the column input and profit as the output. Breakeven occurs when profit goes from a negative to a positive value. Vary number of consignments sold per month from 400 to 1200 in increments of 100. In which interval does breakeven occur?
b. Use Goal Seek to find the exact breakeven point. Assign Set cell: equal to the location of profit, To value: = 0, and By changing cell: equal to the location of the number of sold consignments in your model.