Please complete all work in excel. Use excel to make the calculations (cells can be clicked on to view any formulas used) and be sure to identify your answer, including units. Answers with no formulas within the cell will not be eligible for full credit.

1. Travel Co. specializes in trans-American moves for businesses and individuals through the shipment of containers. For every container the company transports via rail, Travel Co. must pay the rail owners $5,000. In addition, containers are weighed and for each pound of weight, the company must pay $0.40. Harry plans to charge $0.68 per pound to his customers.

a. How many pounds would a container have to hold in order for the company to Break Even? (10 pts)

b. What would the total revenue be at Break Even? (5 pts)

c. The company finds out that to maintain the integrity of its containers, each container could only hold an average of 16,000 pounds. What would the company have to charge customers to make $7,000 in profit on each container? (10 pts)

2. Gas Me Up is considering offering bagged ice sales through a self-service company that would locate a machine on the edge of the parking lot. IceBox would charge a monthly lease fee of $325 for setup and maintenance and there is a utilities cost Gas Me Up incurs of $0.07 for every bag of ice. KeepItCool would charge a monthly lease of only $225, but the added energy cost for every bag of ice is $0.11 due to the larger size of the machine. Customers purchase each bag of ice for $2.50, regardless of the company, but Gas Me Up only earns 40% of the total revenue for each bag of ice sold.

a. What is the annual break-even point for each option? (10 pts)

b. At what volume in number of bags of ice would the two options have the same cost? (10 pts)

c. At what forecasted volume should Gas Me Up select IceBox and what volume should the company select KeepItCool and why? (5 pts)