Alyssa Stuart is thinking of starting a store that specializes in handmade Viennese style bentwood chairs. Before opening her store, Alyssa is curious about how her profit, revenue, and variable costs...

Alyssa Stuart is thinking of starting a store that specializes in handmade Viennese style bentwood chairs. Before opening her store, Alyssa is curious about how her profit, revenue, and variable costs will change depending on the amount she charges for the chairs. Alyssa would like you to perform the work required for this analysis and has given you the data. Here are a few things to consider while you perform your analysis:

• Current competitive prices for Viennese style bentwood chairs are between $225 and $275 a chair.


• Variable costs will be either $100 or $150 a chair depending on the types of material Alyssa chooses to use.


• Fixed costs are $10,000 a month.

Create an Excel file containing the following information:

1. Calculate the break-even point for Alyssa’s shop (the quantity of chairs and total revenue) for both scenarios of pricing. In your opinion, which of the pricing strategies is preferable? Why? For your answer, make sure that your Excel table contains calculations so the Instructor can see the formula in the formula bar for the populated cells.


2. How can Alyssa boost her profits by cost cutting or increase sales? Provide at least three recommendations that you consider the most important.