Question: Please help make an excel spreadsheet Make or Buy Analysis You have decided to get into the business of selling gourmet brownies. The brownies you

Please help make an excel spreadsheet

Please help make an excel spreadsheet Make or Buy
Make or Buy Analysis You have decided to get into the business of selling gourmet brownies. The brownies you will sell can either be made for you, by contracting with a commercial bakery (the buy alternative) OR you can make them yourself (the make alternative). You decide to build a spreadsheet that will allow you to enter the all the relevant data to help you analyze which is the better option. Make Cost Components with this alternative, you will buy the ingredients to make the brownies, hire workers to perform the baking tasks and purchase baking equipment What follows are how to compute these 3 cost components: a) In Mints it takes 10 oz. of ingredients to make one brownie. The following table shows the cost of the ingredients that are used to make the brownies: 1 100 000 .0135 too 001- 150 000 .0129 150 001 200 000 .0125 200 001 300 000 .0117 300 001+ .0110 b) Labor it takes 30 seconds of labor to make 1 brownie. Assume labor costs are $12.50/hr. o) W you determine that you need to purchase an oven and a mixer. An oven costs $13,000 and the mixer costs 5 17,000. You will take out a loan to pay for both pieces of equipment and pay it off in one year at an interest rate of 8.5%. You will make monthly payments (=12 payments). Regardless of how many brownies you are making, add the cost of one month of loan payments. Buy Cost Components with this alternative you will contract a commercial bakery to shows the cost of the ingredients that are used to make the brownies: 1 too 000 .0135 100 001 150 000 .0129 150 001 -200 000 .0125 200 001 - 300 000 .0117 300 001+ .0110 b) Labor - it takes 30 seconds of labor to make 1 brownie. Assume labor costs are $12.50/hr. c) Eggipmem you determine that you need to purchase an oven and a mixer. An oven costs $13,000 and the mixer costs $17,000. You will take out: a loan to pay for both pieces of equipment and pay it off in one year at an interest rate of 3.5%. You will make monthly payments (=12 payments). Regardless of how many brownies you are making, add the cost of one month of loan payments. Buy Cost Components with this alternative you will contract a commercial bakery to make the brownies for you. These are two cost components. (1) gm the bakery will charge you I $0.25 per brownie for the rst 10,000 brownies you purchase I $0.21 per brownie for each brownie over 10,000 purchased For example, if you purchased 13,000 brownies you would pay (.25 " 10,000) + (.21 " 3,000) e) mam - 3.0.03 per brownie but a minimum of $1,000. Tint is, the smallest amount of money you will spend on administration is $1,000. 1) WarehousingLSht'ppr'ng you will have to pay for storing the brownies aer they are made by the commercial bakery. The rate is 3.015 per brownie if you are purchasing over 20,000 brownies. Otherwise the rate is 5.025 pa brownie. You are unsure as to how many brownies you think you will be seliing. In order to see what the costs will be for different amounts, display the costs for the following quanties: 5,000, 15,000, 25,000, and 50,000. (Hint: your spreadsheet should have a row for each of the 4 quantities). For each quantity, create formulas that calculate each component cost and display each component cost. g) Be sure to display the marl cost for the Make and the Buy altenrstives. h) The last column should say either Make or Buy depending on which alternative is lower in cost for that quantity of brownies. i) Also, at the bottom of the total Make and the total Buy costs, display the averages of the 4 quantities. In addition he sure j) that you have an assumption section of the spreadsheet that isolates the constants of the problem. For example the labor time it takes to make a brownie. k) use absolute addressing (using the 3 when referencing a cell) when appropriate. 1) format cells. All costs should be in currency format (U 5 dollars) with two decimals places. at) the headings for the columns should be text wrapped in order to save space It) there is a heading on top of all the columns that l) is entitled Brownie Analysis 2) is centered across all the columns 3) 20 point font 4) has a yellow background You are unsure as to how many brownies you think you will be seliing. In order to see what the costs will be for different amounts, display the costs for the following quantities: 5,000, 15,000, 25,000, and 50,000. (Hint: your spreadsheet should have a row for each of the 4 quantities). For each quantity, create formulas that calculate each component cost and display each component cost. g) Be sure to display the total cost for the Make and the Buy alternatives. h) The last column should say either Make or Buy depending on which alternative is lower in cost for that quantity of brownies. i) Also, at the bottom of the total Make and the total Buy costs, display the averages of the 4 quantities. In addition he sure: j) that you have an assumption section of the spreadsheet that isolates the constants of the problem. For example the labor time it takes to make a brownie. k) use absolute addressing (using the 5 when referencing a cell) when appropriate. 1) format cells. All costs should be in currency format (U 8 dollars) with two decimals places. at) the headings for the columns should be text wrapped in order to save space It) there is a heading on top of all the columns that l) is entitled Brownie Analysis 2) is centered across all the columns 3) 20 point font 4) has a yellow

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!