The assignment requires construction, development and interpretation of a model to solve a business problem.
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Description
The assignment requires construction, development and interpretation of a model to solve a business problem. Each question should be answered on a different sheet of your Excel workbook. Once you have completed your spreadsheet (by the due date), you can submit the completed answer in word document with PDF, the spreadsheet file (DO NOT PDF THE YOUR WORKING EXCEL FILE) and cover sheet. The filename must include your name, so your tutor can easily identify who submitted it (e.g. If your name was Thiagu, you might call your file Thiagu Assignment 3.xls and Thiagu assignment 3.pdf). Answers to written questions should be included in appropriate sheets of your workbook. Remember to pay close attention to presentation and layout when submitting your final spreadsheet models.
Question 1 [Total Marks: 25]
Here we consider the problem of the firm WWF where there is no possibility of importing
units from abroad to sell in Australia. Instead the company makes all units in house and
pays the workers $15 an hour. There is currently excess supply in the widget production
labour market so WWF can hire as many employees as they desire, however, each
employee will be paid at least $15
WWF has rental costs and utility costs totalling $150,000 a year. The current market price
for widgets is $15 a widget, which the firm must take as given. WWF determines what
quantity to produce, assume for starters, they wish to produce 1,000 units a week. Also,
assume that WWF will sell every unit they produce. Use this information to answer the
following questions
i) What is the VC associated with producing widgets? What are the fixed costs?
ii) Build a spreadsheet model for WWF to help them determine what quantity of
widgets to produce and how many employees to hire. Use the following
information
