Breakeven Analysis allows you to assess how profitable a project will be based on how much you sell each unit for and how many units you sell. In the following example, assume you own a small company that has developed a new exercise devicecalled The Striderthat tells someone how far they have walked, how many calories they have burned and how many paces per mile they have tallied. Assume the following facts. The machine that makes the device was purchased for $11,500. The microprocessors, the plastic case materials, and the labor needed to assemble it costs $15 for each device. You have decided to sell the product directly to the consumer through a website promoted through ads. The price you intend to charge each buyer for the Strider is $42. Before you market the product, you decide to create a spreadsheet to estimate the revenues, costs, profits and Breakeven Point. Go to the Excel Student Spreadsheets BUS 1011 and click on the tab/worksheet labeled Breakeven Analysis. Enter the following data: In B3 type 10000 units sold. In B4 type $42 per unit sales price. In B5 enter the formula =B3*B4 to calculate the revenue. In B7 type $11,500 in fixed costs. In B8 type 15 as the variable costs associated with making each unit. In B10 enter the formula =B7+B8*B3 which is the total costs (fixed costs plus the $15 for each unit multiplied by the total number of units sold 10000). In B12 enter the formula =B5-B10 to calculate the profits as revenues costs. B14 calculates the Breakeven Point, which is FIXED COSTS/ (PRICE VARIABLE COSTS). Enter the formula =B7/(B4-B8) Note that the Breakeven Point is in units and should therefore be rounded. You should set up the spreadsheet with the appropriate formulas to change the price, cost and sales volume quickly. Answer the following questions: 1. Whatareyourrevenues,totalexpensesandprofitifyousell10,000Striders? 2. HowmanyStridersdoyouneedtosellat$42tobreakeven? 3. Whatareyourrevenues,expensesandprofitifyousell15,000Stridersbylowering the price to $35 each? 14 4. HowmanyStridersdoyouneedtosellat$42tomake$500,000inprofits?(Findthe answer by using the formula to calculate the profit, i.e., Profit = Revenue - Total Cost.) Write in the spreadsheet how you got the answer