Discuss iLab Overview
Required Software
Lab Steps
STEP 1: Open Worksheet and Complete the Income Statement
STEP 2: Analyze the Difference in Total Expenses and Net Income When You Vary the Number of Students
STEP 3: Analyze the Difference in Net Income When You Vary the Number of Students and the Charge Per Student
STEP 4: Create Scenarios and a Scenario Summary
STEP 5: Create a Documentation Sheet and Provide a Recommendation
Your friend, Adair Deske, is considering opening a day care center. She has started compiling her assumptions and putting together an Income Statement. She has determined that she must make at least $75,000 profit per year in order to start the business. She has asked you to analyze her Income Statement and help her determine whether it is viable for her to start this business. You have agreed to help her complete her Income Statement and to perform What-If analysis to help her look at her potential profitability.
When submitting the workbook to the Dropbox, provide a comment in the Dropbox comments area explaining what you learned from completing this iLab activity.
Deliverables
NOTE
Submit your assignment to the Dropbox, located at the top of this page. For instructions on how to use the Dropbox, read these step-by-step instructions.
(See the Syllabus section "Due Dates for Assignments & Exams" for due dates.)
You will turn in one Excel workbook for this iLab.
File naming convention: If your name is Jane Doe, then your files should be named very similar to: Doe_J_Week5_iLab6.xlsx
Click to download the Grading Rubric for Lab 6
Remember This
There are two iLabs this week, and there is a separate Dropbox basket for each one. Be sure to submit your work for this iLab (Lab 6) to the Dropbox basket labeled Week 5: iLab 6.
Required Software
Microsoft Office: Excel 2013
Options for accessing Microsoft Excel 2013:
Use a personal copy on your PC. You can request a copy of Microsoft Office 2013 via the Student Software Store icon on the Course Resources Page
If you are a MAC user, click to read the MAC User Information.
Click DeVry virtual lab to access Microsoft Excel in the virtual lab. For additional virtual lab information and tutorials on saving files, click the iLab icon on the Course Resources page.
Lab Steps
STEP 1: Open Worksheet and Complete the Income Statement
Adair needs your help in completing her Income Statement. She has provided the basic assumptions, but you need to provide the calculations that will be used as you perform What-If analysis.
Complete the following calculations.
Revenue
Total Revenue: Multiply tuition per day times number of days by number of children.
Variable expenses are those expenses that will depend on the number of children served each year. Jane has provided the assumptions. Define annual costs based on the cost per day multiplied by the number of children multiplied by the number of days.
Food Expenses
Supply Expenses
Teacher Cost: Create a VLOOKUP function to determine the annual teacher cost. The Lookup Value is the number of children. The
Lookup Table is in cells E3:F7. The Index Column is the second column in the table. You want the closest match. Multiply the LOOKUP function times the annual teacher salary.
Total Variable expenses: This will be the SUM of all of the Variable Expenses (B17:B19).
Summary. Use formulas in these cells because you will wish to change the values in your assumption section to see how these changes impact the Net Income.
Total Revenue should refer to the Total Revenue cell (B14).
Total Expense is Variable Costs + Fixed Costs.
Net Income is Total Revenue - Total Expense
Rename the file according to the file naming conventions as shown at the top of this page.
Your Income Statement should look like the one below, but it is important that you have created formulas rather than typing in amounts. As you perform What-If analysis, the formulas will be recalculated to show you the results of changing assumptions.
Image Description
STEP 2: Analyze the Difference in Total Expenses and Net Income When You Vary the Number of Students
Adair desires to look at the differences in her net income depending on the number of children she cares for. Her house will accommodate no more than 15 children, and she believes she should have no less than six children. Because you are varying only one of your assumptions, you can develop a one-variable data table. A one-variable data table will allow you to see the impact of changing one variable-and see the results on multiple outputs.
Set up the Data Table to display number of children from 6 through 15. Add a descriptive title to the Data Table.
Show the Expenses and Net Income for each change in number of children.
Populate the Data Table using the Data tab, What-If analysis, Data Table tool.
Apply Conditional Formatting to Net Income that is above $75,000.
Your final Data Table should look something like this. screenshot example of the final data in Excel
STEP 3: Analyze the Difference in Net Income When You Vary the Number of Students and the Charge Per Student
Adair also wishes to look at the impact on Net Income when she varies the number of students and the charge per student. Use a two-variable data table to analyze.
Set up the Data Table to display number of children as the row input (6-15) and charge per student (35-75 in $5 increments) as the column input.
Enter Net Income in the result cell, and format this cell to display no data.
Add a descriptive heading.
Create the data table and apply conditional formatting to Net Income values over $75,000.
Your Data Table will look something like this. screenshot example of the final data in Excel
STEP 4: Create Scenarios and a Scenario Summary
Adair wants to look at three scenarios. Be sure to save each scenario with a unique name, and place the name of the scenario on the sheet, so that when the scenario changes, the name on the sheet changes to match the scenario.
Scenario Teacher Salary
Supplies Number Tuition
1. Economy
15,000 25 15 35
2. Midrange
26,000 60 8 50
3. High
38,000 100 6 100
She wants to see the Net Income that would be achieved in each Scenario and compare this to her original assumptions.
Name the cells that will be used in the Scenario.
Create the three Scenarios.
Create a Scenario Summary.
Move the Scenario Summary to the end of the workbook.
STEP 5: Create a Documentation Sheet and Provide a Recommendation
Add a documentation sheet to the beginning of the workbook. Include Author, date Created, Last Modified, and Contents sections.
Provide a recommendation to Adair.
Format the documentation sheet to match the look and feel of the other sheets in the workbook.
Add a graphic to the documentation sheet.
Review the attachment:
Attachment:- Adair's Day Care.xlsx