M&M Case Study: Break-Even Analysis This exercise provides you the opportunity to apply break-even analysis concepts and Excel skills

M&M Case Study: Break-Even Analysis

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, and you are responsible for the M&M product line. Mars has given you some pricing forecast data concerning 2022 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 2022 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 $14.75 per case

· Supplier C: 48-count 1.74 oz bags will have a cost of $15.00 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 $15.65 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 $7.57 per case

· Marketing costs (variable cost) for the candy are $3.00 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

$36.00 per case selling price. To accomplish this, however, marketing costs will need to be increased by 35%. 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

1

image1.jpeg

image2.png

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Expanding an Executive Communication Report Proposal into a Formal Report Background: In today’s fast-paced business world, effective communication

Expanding an Executive Communication Report Proposal into a Formal Report Background: In today’s fast-paced business world, effective communication is essential for organizational success. Executives often rely on concise communication reports to make informed decisions. This assignment builds on the skills you developed in creating a 1-2 page executive communication report