A tablet computer manufacturer has three models in its product line: The Mini model costs $375 to
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Question:
A tablet computer manufacturer has three models in its product line:
- The Mini model costs $375 to produce and sells for $499. 60,000 were sold.
- The Standard model costs $390 to produce and sells for $699. 30,000 were sold.
- The Pro model costs $435 to produce and sells for $899. 15,000 were sold.
The company plans to spend $300,000 to advertise the Mini, $500,000 to advertise the Standard and $400,000 to advertise the Pro. These costs will be incurred regardless of how many units are sold.
Using Excel, put the above information into a spreadsheet, and develop a financial model which does the following:
- Using selling prices and production costs, calculates per-unit gross margin (profit) dollars and percent of selling price.
- Uses selling prices and units sold to calculate total revenue from each model and the total for all three models
- Calculates total production costs from each model and the total for all three models
- Calculates gross profit of each model and the total for all three models
- Calculates net profit of each model and the total for all three models by deducting advertising expenses
- Displays the net profit of the three models in a chart which conveys the relative profit contribution of each model.
Related Book For
Management Science The Art of Modeling with Spreadsheets
ISBN: 978-1118582695
4th edition
Authors: Stephen G. Powell, Kenneth R. Baker
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