This exercise provides you the opportunity to apply break-even analysis concepts and Excel skills to a case study problem. The activity continues our work with Mars Inc. M&M candies.

Assignment

Your company is a wholesaler of Mars candies, where you are responsible for the M&M product line. Mars has given you some pricing forecast data concerning 2021 product prices and payment terms. You need to determine the break-even points for your facility based on the information detailed below.

 

Plain M&M Analysis: You have identified the following 2021 price points on cases of Plain M&M candies from five different suppliers (variable costs)

· Supplier A: 48-count 1.74 oz bags will have a cost of $15.91 per case

· Supplier B: 48-count 1.74 oz bags will have a cost of $15.65 per case

· Supplier C: 48-count 1.74 oz bags will have a cost of $14.75 per case

· Supplier D: 48-count 1.74 oz bags will have a cost of $14.91 per case

· Supplier E: 48-count 1.74 oz bags will have a cost of $15.00 per case

 

Your additional costs are below:

· Fixed costs for your warehouse are $4,500,000 annually

· The selling price per case is $32.99

· Labor costs (variable cost) for the warehouse are $5.67 per case

· Marketing costs (variable cost) for the candy are $2.00 per case

 

Assignment:

Part #1: You need to analyze the break-even point for each of the listed supplier options (** Hint-You will need to calculate five break-even points).

In the Excel document for this assignment, there are five tabs named “Part #1 Supplier A” through “Part #1 Supplier E”. Each tab represents one of the five payment options. Complete the indicated break-even analysis by filling in the indicated columns, cells, and graphs. Remember, every chart must have a title, axis labels, axis titles, and a legend.

Determine the supplier option that results in the lowest break-even point based on the number of cases and dollars (** Hint – it should be the same price point option for both the number of cases and dollars). Complete the information on the “Conclusions” tab for Part #1.

Part #2: The market has changed. Your VP of sales indicates that the market will support a

$35.00 per case selling price. To accomplish this, however, marketing costs will need to be increased by 25%. You need to analyze the break-even point for the option you selected with the lowest break-even point in Part #1. Use the “Part #2” tab in the document for your analysis. Complete the information on the “Conclusion” tab for Part #2.

Part #3 – Finally, answer the question on the “Conclusions” tab for Part #3.

 

Submit one file with the filename Breakeven.xlsx

Grading:

Part #1:

Break-even graph for optimal option 10 points

· Graph Title 1 point

· x-axis title 1 point

· x-axis labels 1 point

· y-axis title 1 point

· y-axis labels 1 point

· Legend 2 points

· Data lines (fixed costs, revenue, and total costs) 3 points

Correct break-even point (in units) for each supplier option (2 points each) 10 points Correct break-even point (in dollars) for each supplier option (2 points each) 10 points

Part #2:

Correct new break-even point (in units) for optimal supplier option 2 points Correct new break-even point (in dollars) for optimal supplier option 2 points

New break-even graph for the optimal option 10 points

· Graph Title 1 point

· x-axis title 1 point

· x-axis labels 1 point

· y-axis title 1 point

· y-axis labels 1 point

· Legend 2 points

· Data lines (fixed costs, revenue, and total costs) 3 points

 

Conclusions

Part #1:

Identification of optimal options:

· Optimal option 1 point

· BEPU 1 point

· BEP$ 1 point

Part #2:

Identification of new break-even points:

· BEPU 1 point

· BEP$ 1 point

Part #2:

Reflection 6 points

Total Points: 55 points

 

1

 

1

 

 

 

T

his exercise

 

provide

s

 

you the opportunity to apply break

–

even analysis concepts

and Excel

skills to a case study problem.

The

activity

 

continues our work with

Mars Inc.

M&M candies

.

 

 

 

Assignment

 

Your company is a wholesaler of Mars candies

, where y

ou are responsible for the M&M product

line. Mars has given you some pricing forecast data concerning 202

1

 

product prices and payment

terms. You need

 

to

 

determine the break

–

even points for you

r facility based on the information

detailed below.

 

 

Plain M&M Analysis:

You have identified

the following 202

1

 

price points on cases of Plain

M&M candies

 

from five different suppliers

 

(variable costs)

 

·

 

Supplier A:

 

48

–

count 1.74 oz bags will have a cost of $15.91 per

 

case

 

·

 

Supplier B:

48

–

count 1.74 oz bags will have a cost of $15.65 per

 

case

 

·

 

Supplier C:

48

–

count 1.74 oz bags will have a cost of $1

4.75

 

per

 

case

 

·

 

Supplier D:

48

–

count 1.74 oz bags will have a cost of $14

.91 per

 

case

 

·

 

Supplier E:

48

–

count 1.74 oz bags will have a cost of $1

5.00

 

per

 

case

 

 

Your additional costs are below:

 

·

 

Fixed costs for your warehouse are $4,500,000

 

annually

 

·

 

The selling price per case is

 

$32.99

 

·

 

Labor costs (variable

 

cost

) for the

warehouse are $5.67 per

 

case

 

·

 

Marketing costs (variable

 

cost

) for the candy are $2.00 per

 

case

 

 

Assignment:

 

Part #1:

You need to analyze the break

–

even point for each of the listed

supplier

options

 

(**

 

Hint

–

You will need

to calculate

five break

–

even points)

.

 

 

In the Excel document for this assignment,

there are five tabs

 

named “Part #1

 

Supplier A

”

 

through “Part #1 Supplier E”.

 

Each tab represents one of the five payment options. Complete

the indicated break

–

even analysis by

filling in

 

the indicated columns

, cells

,

 

and graphs.

Remember, every

chart

 

must have a title, axis labels, axis titles, and a legend.

 

Determine the

supplier

 

option that results in the lowest break

–

even point based on the number

of cases

and

 

dollars

(**

 

Hint

–

 

it should be the same price point option for both the number of

cases and dollars)

.

Complete the information on the “Conclusions”

tab

for Part #1.

 

Part #2:

The market has changed. Your VP of sales indicates that the market will support a

 

$35.00 per case selling price. To accomplish this, however, marketing costs will need to be

1

 

 

This exercise provides you the opportunity to apply break-even analysis concepts and Excel

skills to a case study problem. The activity continues our work with Mars Inc. M&M candies.

 

Assignment

Your company is a wholesaler of Mars candies, where you are responsible for the M&M product

line. Mars has given you some pricing forecast data concerning 2021 product prices and payment

terms. You need to determine the break-even points for your facility based on the information

detailed below.

 

Plain M&M Analysis: You have identified the following 2021 price points on cases of Plain

M&M candies from five different suppliers (variable costs)

 Supplier A: 48-count 1.74 oz bags will have a cost of $15.91 per case

 Supplier B: 48-count 1.74 oz bags will have a cost of $15.65 per case

 Supplier C: 48-count 1.74 oz bags will have a cost of $14.75 per case

 Supplier D: 48-count 1.74 oz bags will have a cost of $14.91 per case

 Supplier E: 48-count 1.74 oz bags will have a cost of $15.00 per case

 

Your additional costs are below:

 Fixed costs for your warehouse are $4,500,000 annually

 The selling price per case is $32.99

 Labor costs (variable cost) for the warehouse are $5.67 per case

 Marketing costs (variable cost) for the candy are $2.00 per case

 

Assignment:

Part #1: You need to analyze the break-even point for each of the listed supplier options (**

Hint-You will need to calculate five break-even points).

In the Excel document for this assignment, there are five tabs named “Part #1 Supplier A”

through “Part #1 Supplier E”. Each tab represents one of the five payment options. Complete

the indicated break-even analysis by filling in the indicated columns, cells, and graphs.

Remember, every chart must have a title, axis labels, axis titles, and a legend.

Determine the supplier option that results in the lowest break-even point based on the number

of cases and dollars (** Hint – it should be the same price point option for both the number of

cases and dollars). Complete the information on the “Conclusions” tab for Part #1.

Part #2: The market has changed. Your VP of sales indicates that the market will support a

$35.00 per case selling price. To accomplish this, however, marketing costs will need to be