Fictional assignment
Compare three contract options for Linden Printworks.
The operations manager supplied an illustrative fee per order, expected order count, variable cost and fixed setup cost for each option. Recommend the option with the highest operating result, provided its break-even volume is no greater than the expected orders.
All records and amounts are fictional practice data. Deliver the completed workbook and a formula-based answer that updates when the inputs change.
A higher fee doesn't guarantee a better operating result. The number of orders and the cost of serving them both matter. Contribution per order is the fee less the variable cost. Multiplying that contribution by expected volume gives the amount available to cover fixed cost.
This case compares three fictional contracts on the same basis. Calculate contribution, break-even volume and operating result before choosing an option. Round break-even orders up: you can't sell a fraction of an order. A contract that looks profitable at the forecast may still carry little room for a shortfall. Test the recommendation with the supplied forecast rather than assuming the highest fee wins.