Instructions: Review the following memorandum and provide a response to the information requested.

FROM: Senior Consultant

TO: Consulting Team

RE: Projections for Upcoming Year

A smaller 2-year old emerging venture is set to enter a new segment of its original target market, with a modified version of very popular product already being sold by about a half dozen suppliers in that space. Marketing research produced the revenue model: 3464.5Q - 0.07874Q2.

Her targeted price seems to be around $3,200 +/- (she hopes, subject to many factors). We've helped her develop an overhead/operations budget for next year at $965,000. Her labor + materials + related direct cost of production are modeled as: 2,566.59Q + .0811Q2.

TIP: Unlike the example, this cost production function only has two terms (Q and Q2). So please only use the information given (adjust the Excel file in class to only two terms). Use the second file, the one accessed with the link above on this page, for your assignment.

plete some analysis in time for our meeting with her and her advisory team. We examined a range of possible annual production runs between 400 and 4,000 units manufactured and sold. We need some basic answers.

I already this these:

PROFIT MARGIN IS 299Q - 0.03857Q2 - 46,280 + 344.25Q - 0.1152Q2 + 0.000015889Q3

MARGINAL REVENUE FUNCTION IS Equals first derivative of revenue function (revenue function = 299Q - 0.03857Q2)

MARGINAL COST FUNCTION Marginal cost function is a derivative of the total cost function (total cost function = 46,280 + 344.25Q - 0.1152Q2 + 0.000015889Q3)

I need:

1. Marginal profit and graph

2. Gross profit, gross margin at your recommended output, Price, and VC/unit

3. Maximum revenue and quantity for such

4. Maximum profit and quantity on that, with MR, MC

5. Break even point for this production configuration