Faculty of Engineering at Shoubra 4th year Production (Design)

Using Computer in Planning, Analysis, and Control – MPD445 Semester 232

Lab No. 5: Break-Even/Cost-Volume Analysis

Student Name: ‫احمد عبدالحميد محمد عوض قنديل‬ Student No.: 12

Exercise #1:
Construct the flowchart, write a C++ program and construct the Excel sheet
to calculate the breakeven volume, the total cost at breakeven point, and the
profit.
Where:
FC
NBep p v
TCBep = FC + v NBep
Profit = TR – TC
TR = p N
Run the program for the following data:
FC=$50,000, v = $4/unit, p = $8/unit, and N=100,000 (to calculate the profit)
Solution

Dr. Sayed Ali Zayan 1

Faculty of Engineering at Shoubra 4th year Production (Design)
Using Computer in Planning, Analysis, and Control – MPD445 Semester 232

Flow chart:

Start

FC, V, P, N

𝑁𝐵𝑒𝑝

𝑇𝐶𝐵𝑒𝑝

TC

TR

Profit

𝑁𝐵𝑒𝑝 , 𝑇𝐶𝐵𝑒𝑝 , profit

End

Dr. Sayed Ali Zayan 2

Faculty of Engineering at Shoubra 4th year Production (Design)
Using Computer in Planning, Analysis, and Control – MPD445 Semester 232

C++ program:

Program output: Required picture from the computer

Dr. Sayed Ali Zayan 3

Faculty of Engineering at Shoubra 4th year Production (Design)
Using Computer in Planning, Analysis, and Control – MPD445 Semester 232

Excel Sheet:

Dr. Sayed Ali Zayan 4

Faculty of Engineering at Shoubra 4th year Production (Design)
Using Computer in Planning, Analysis, and Control – MPD445 Semester 232

Exercise #2:
TJ manufacturing intends to increase capacity through the addition of new equipment.
Two vendors have presented proposals A and B. Construct the flowchart, write a C++
program, and Excel sheet to determine the following:
a) What is the breakeven point for proposal A?
b) What is the breakeven point for proposal B?
c) Which alternative should be chosen?
Run the program using the following data:
FCA =$50,000, FCB = $70,000, vA = $12, vB =$10, p=$20/unit, expected volume is 8,500
units (for select the best alternative), and use the following formulas:

NA A TCA= FCA + vA NA FC
p vA NAB B
TCB= FCB + vB NB
FC FCA
NB B
vA vB
p vB
FC

Solution

Dr. Sayed Ali Zayan 5

Faculty of Engineering at Shoubra 4th year Production (Design)
Using Computer in Planning, Analysis, and Control – MPD445 Semester 232

Flow chart:

Start

𝐹𝐴 , 𝐹𝐵 , P, 𝑉𝐴 ,
𝑉𝐵 , N

𝑛𝑎

𝑛𝑏

𝑇𝐶𝐴

𝑇𝐶𝐵

𝑇𝑛𝐴

𝑇𝑛𝐵

𝑛𝐴𝐵

Yes 𝑇𝑛𝐴 <𝑇𝑛𝐵 No

Select A Select B

𝑛𝐴𝐵

End

Dr. Sayed Ali Zayan 6

Faculty of Engineering at Shoubra 4th year Production (Design)
Using Computer in Planning, Analysis, and Control – MPD445 Semester 232

C++ program:

Program output: Required picture from the computer

Dr. Sayed Ali Zayan 7

Faculty of Engineering at Shoubra 4th year Production (Design)
Using Computer in Planning, Analysis, and Control – MPD445 Semester 232

Excel Sheet:

Dr. Sayed Ali Zayan 8

Faculty of Engineering at Shoubra 4th year Production (Design)
Using Computer in Planning, Analysis, and Control – MPD445 Semester 232

Exercise #3:
The Quality Sweaters Company sells hand-knitted sweaters. The company is planning
to print a catalog of its products and undertake a direct mail campaign. The cost of
printing the catalog is $20,000 plus $0.10 per catalog. The cost of mailing each catalog
(including postage, order forms, and buying names from a mail-order database) is $0.15.
In addition, the company plans to include direct reply envelopes in its mailings and
incurs $0.20 in extra costs for each direct mail envelope used by a respondent. The
average size of a customer order is $40, and the company’s variable cost per order
(primarily due to labor and material costs) averages about 80% of the order’s value—
that is, $32. The company plans to mail 100,000 catalogs.
It wants to develop a spreadsheet model to answer the following questions:
1. How does a change in the response rate affect profit?
2. For what response rate does the company break even?
3. If the company estimates a response rate of 3%, should it proceed with the
mailing?
4. How does the presence of uncertainty affect the usefulness of the model? Business
Objectives To create a model to determine the company’s profit and to see how
sensitive the profit is to the response rate from the mailing.
Excel Objectives To learn how to work with range names, to learn how to answer what-
if questions with one-way data tables, to introduce Excel’s Goal Seek tool, and to learn
how to document and audit Excel models with cell comments and Excel’s formula
auditing tools.

Dr. Sayed Ali Zayan 9