Break even analysis USE EXCEL Gallant Carpet Cleaning cannot meet demand with its current equipment. Gallant Carpet...

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Break even analysis USE EXCEL
Gallant Carpet Cleaning cannot meet demand with its currentequipment. Gallant Carpet Cleaning is considering two new carpetcleaning machines. Machine A cleans carpets to residentialstandards, while machine B cleans and sanitizes carpets to hospitalstandards. Machine A costs $25,000 and machine B costs $36,000. Thecompany estimates its cost per cleaning (including all chemicals)for machine A will be $10 and machine B will be $8. The revenue percarpet cleaned for A would be $42, while B could bring in $45 percarpet, due to the higher degree of sanitation provided.
Complete the table below for the data as well as equations(using Q) for Total cost (TC), Total Revenue (TR) and Profit(Pr).
# of Carpets cleaned =Q
Machine A
Machine B
FC
v= Variable cos1/unit
Selling price =R
TC
TR
Profit (Pr)
Break-Even Q
Machine B needs to clean how many more carpets than machine A tobreak even?
How many carpets Q to be cleaned will make you becomeindifferent between choosing Machine A or B? Show your work.
Plot the Profit graphs (on same graph) for each machine type.From your graph, recommend over what range of more carpet cleaningdemand (Q) which machine type will be preferred.

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3.7 Ratings (482 Votes)

The following question can be solved through calculations in1 Formulation of the table andcalculationsFormula used for break even point2 Formulas used in ExcelTotal cost Fixed costs Break even See Answer

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# of Carpets cleaned =Q	Machine A	Machine B
FC
v= Variable cos1/unit
Selling price =R
TC
TR
Profit (Pr)
Break-Even Q