1st part data results unit revenue $900 total revenue $180,000 fixed cost $50,000 total fixed cost $50,000 marginal cost $400 total variable cost $80,000 sales forecast 300 profit (loss) $50,000 production cost 200 break-even point 100 [for all questions, assume flexible production capacity > sales forecast + confirmed orders /similar] break-even analysis

2nd part data results unit revenue $900 total revenue $270,000 fixed cost $50,000 total fixed cost $50,000 marginal cost $400 total variable cost $120,000 postage per unit $10 fax machine cost $90 "new sales" forecast 300 profit (loss) $100,000 confirmed future orders 100 break-even point 100 (real break even) production quantity 300 food for thought how will a 10 % discount on the last 100 products affect the break even analysis? If number of units sold increases by 155 units, how will it affect the break even number?

Solve each of the questions below as a separate functional model on this worksheet (consider the 2nd part above, with new sales of 430, for all the questions below) if you knew that a 25 % discount on the last 200 units would cause the new sales to increase to a total of 430, would you do it? If you knew that a 40 % discount on the last 200 units would cause the new sales to increase to a total of 430, would you do it? What is the maximum discount you would provide on the last 200 units if you wanted to maintain the same profit amount, but lower profit % and higher market share?

How would and increase or decrease in the capital costs for machinery / real estate affect the breakeven point? How would it affect the discount you could offer? If the capital costs were to increase by 20%, what is the maximum discount you could offer on the last 200 products, for new sales forecast of 430 with same profit amount objective?