1. Southwest Clothing Company, produces denim jeans, is planningto introduce a new line of lime green jeans. Each pair of jeanscosts $5.50 for fabric and $3.00 for labor. Each pair will be soldfor $24.99 each. Fixed costs are estimated as $10,000 per month.Southwest intends to build an EXCEL model to explore the optionsfor production.
a. Set up a spreadsheet model to calculate total profit withproduction quantity as the decision variable - assumingthat Southwest will sell all of the jeans that areproduced.
b. Use the Excel tool Data/What-If Analysis/Goal Seekto determine the break-even quantity for the jeans.
c. Use the Excel tool Data/What-If Analysis/Data Tableto create a one-way table to demonstrate the sensitivity of profitto changes in selling price per pair of jeans
Use prices of 21.99 23.99 25.99, 27.99 and 31.99 in yourtable.
d. Create a graph of the one-way table results.
