# BASE CASE

Please see attachments.

I have to analyze these for a job-related assignment and am under a time crunch. If I can just get an idea of the graphs and so forth I can build my report better.

The attachment named "Problems" are what needs to be analyzed

The PP is just directions and the Excel sheet is the generic tool

https://brainmass.com/economics/demand-supply/base-case-modified-breakeven-analysis-71293

#### Solution Preview

Please refer to the attachment.

EXCEL PRICING TOOL INSTRUCTIONS

create a BASE CASE by inserting 5 data points (2 points on the demand curve [Q1-P1; Q2-P2], a price increment, variable cost, and fixed cost) into the appropriate cells of Excel Pricing Tool to perform a "modified" breakeven and price sensitivity analysis to determine an appropriate price for a hypothetical product.

Quantity:

Q1 Price:

P1 Quantity:

Q2 Price:

P2 Price

Increment Variable

Cost Fixed

Cost

11,881.00 $39.00 20,000.00 $6.00 $0.50 $4.00 $80,000.00

The prices in rows 34 - 37 and column F & G (P3 - P6) are not associated with product demand and do not affect spreadsheet calculations. They can be used to understand the association between revenue and cost as depicted on the chart labeled "Modified Breakeven."

Input the data points provided to you by your faculty member into the spreadsheet to perform this assignment.

Section #1:

employ data set and the spreadsheet to determine and discuss the issues in the section.

The incorporation of data set into the spreadsheet represents the hypothetical demand of a brand or firm in the firm's final consumer marketplace.

1. [Base Case]

• Determine an approximate profit maximizing price from spreadsheet.

From the sheet "Revenue and Profit", we find that the maximum profit is $2250 when 8500 units are produced. So the price is $15.50.

• Determine the location (price / quantity point) of the profit maximizing price on the demand curve.

Because the spreadsheet is protected by password and cannot be edited, I cannot show the position on the graph. However, the point (8500, 15.5) can be easily found on the demand curve.

• Determine revenue, variable costs, and total cost ...

#### Solution Summary

Help to understand the association between revenue and cost is offered.