CS&E 1111 LAB 8: PROBLEM SOLVING
30 POINTS
PURPOSE:
The purpose of this lab is to expand your problem solving and spreadsheet design skills by providing a
task that requires solving a complex problem. This lab will also cover the use of additional Excel
functions such as Reference Functions and Financial Functions. You will be asked to design your own
workbook solution. There is no one right way to do this, however some ways make it easier than others
to update information and create multiple cases. Correct spreadsheet design will facilitate this type of
analysis, which is common in the business world. Frequently, information will change or you will need to
explore several possible scenarios.
LAB 8: PRE-LAB ASSIGNMENT –COMPLETE BEFORE COMING TO LAB:
SPREADSHEET DESIGN – AUTO OIL RANCH PROBLEM
You own a small auto repair business named Auto Oil Ranch which provides quick oil lubes and air filter
changes to your customers. As the owner, you are preparing a profit analysis for your company. Use
the information that follows to setup a workbook solution for calculating profit. Be sure to read the
entire data and calculation sections PRIOR to attempting this problem Remember an extra 10 minutes
spent planning your design could save you hours in execution and what-if analyses later!
DATA SECTION
Information has been gathered from the previous year about your expenses and your revenue as
follows:
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Garage Information
o
You have 3 garages. Each garage operates a total of 60 hours per week and are open 6 days per
week, 52 weeks per year.
o
Garages 1 and 2 each employs 4 mechanics and 1 manager. Garage 3 is larger and employs 6
mechanics and 1 manager.
Employee wages
o
Mechanics work for 40 hours a week at $13 an hour for 52 weeks per year
o
Managers make $44,000 a year.
Maintenance expenses
o
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During last year on average you paid $1250 a month per garage for maintenance costs for
garages 1 and 2. Maintenance costs for garage 3 averaged $1500 per month.
Supply expenses
o
The Refined oil you use is $3.30 per gallon. Each car will require 6 quarts of oil on average. (4
quarts per gallon)
o
Hazardous waste removal per gallon is $4. Assume the amount of hazardous waste is equal to
the number of gallons of oil replaced.
CSE 1111
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o
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Rent
o
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Air filters are $9.80 each. On average about 1/6th of your customers get this service.
Rent for gargages 1 and 2 are $2000 per month. The rent for garage 3 is $3000 per month.
Revenues
o
You charge $27 per oil change. On average there are 60 customers getting oil changes per
garage per day for garages 1 and 2. Garage 3 averages 80 customers per day.
o
Additionally some customers get their air filter changed, which costs an additional $19 dollars.
On average about 1/6th of your customers get this service.
CALCULATING PREVIOUS YEAR’S PROFIT
Using the data given, calculate your annual profits for the past year. This will involve calculating total
revenues, expenses and taxes as outlined in this section. Such information will enable you, as the owner,
to make informed decisions about your company. Make sure to design your workbook so that anyone
using it can easily change numbers to perform What-if Analyses. Please explicitly list all inputs so they
are easy to identify and update and use cell references whenever possible in your formulas. Failure to
do so will result in loss of credit, even if the numeric values are correct.

Calculate expenses for each cost component (ie: mechanics wages, managers, oil, hazardous waste
etc) for each garage and total expenses for your overall business.

Use the data that you have been given to calculate your revenues from each revenue component
(oil changes, filters) for each garage and total revenues for all 3 garages.

Calculate the net profit (revenues – expenses) for each garage and for your overall business. This is
the amount of money the garages made after expenses are deducted. (Hint: in this case, the
garage’s total profits are $454,640 before taxes)

Calculate taxes based on the net profit for all garages combined (per garage values not needed). Tax
rates are determined based upon your net profit. The tax owed is then calculated as the applicable
tax rate times the net profit. Make a table on a new worksheet to reflect the following tax rates:
o
if your company makes a net profit of less than $100,000 you are taxed at 5% ,
o
if your company makes a net profit of at least $100,000 but less than $500,000 you are taxed at
15%,
o
if your company makes a net profit of $500,000 or more you are taxed at 25%.

After you make the new worksheet, use a lookup function to calculate the amount you have paid in
taxes and your profits after-tax. If you do not recall how to create a lookup table – refer to the
appropriate chapter/slides in the course text.
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Save your completed result as AutoOilRanch.xlsx.
CHECKLIST
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AutoOilRanch.xlsx
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