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Home / Questions / Problem 1 Angelo Cappellini owner of Pop’s Pizza is trying to get a handle on the costs fo...

Problem 1 Angelo Cappellini owner of Pop’s Pizza is trying to get a handle on the costs for his business. Angelo estimates the fixed costs per year to be $130000 based on his lease utilities emp

Problem 1 Angelo Cappellini, owner of Pop’s Pizza, is trying to get a handle on the costs for his business. Angelo estimates the fixed costs per year to be $130,000, based on his lease, utilities, employee costs, and other overhead costs. He has calculated his variable cost for each unit of pizza produced to be $3. a. [Sheet ‘Problem 1a’] Angelo is considering selling pizzas for $8 each. At that unit price, how many pizzas will he need to sell to break even (Profit is the difference between Revenue and Total Cost, and breaking even occurs when Profit is $0)? Use Goal Seeking in Excel to find your answer. b. [Sheet ‘Problem 1b’] Angelo’s business is open 11 hours per day 300 days per year, and he sells an average of 9 pies per hour. Assuming he sells pizzas at $8 each, will Angelo turn a profit? If so, how much profit will Angelo make? Problem 2 Due to rising costs, Angelo is exploring the possibility of changing the price of his pizzas, but he knows that doing so may have an impact on the amount pizzas he sells and as such on his profits. Angelo has figured out that his fixed costs have increased to $135,000 and his variable cost for each pizza has risen to $3.15. The ‘Problem 2’ sheet in your Excel workbook has the input values for a Data Table that shows profitability based on different Unit Prices and Quantities Sold. After creating your data table, apply Conditional Formatting that highlights any profits below $0 red, any profits between $0 and $15000 yellow, and profits above $15000 green.

Feb 10 2020 View more View Less

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