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Golden Star Winery produces midlevel wines consumed primarily in North America.

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Golden Star Winery produces midlevel wines consumed primarily in North America. Given below is the projected income statement for the company for 2011.;Projected Income Statement (2011);Sales (100,000 cases at $7 per case);$700,000;Cost of goods sold;Materials;$180,000;Labor;$225,000;Fixed manufacturing expenses;$45,000;Administrative and selling expenses;Delivery;$30,000;Commissions;$50,000;Advertising;$10,000;Travel;$5,000;Fixed administrative and selling expenses;$15,000;Total expenses;$560,000;Net income before taxes;$140,000;Create a report answering the following questions;Complete the following table in a fully functional Microsoft Excel spreadsheet.;Price;Quantity;Total Revenue;Total Variable Cost;Total Fixed Cost;Total Cost;Profit;$8.00;65,000;$7.75;75,000;$7.50;80,000;$7.25;90,000;$7.00;100,000;$6.75;115,000;$6.50;120,000;Using Excel, prepare a graph showing the breakeven point and any profit or loss at the current price of $7. Explain to the Golden Star management the implications of this analysis.;What is the elasticity coefficient for each price between $6.50 and $7.50? Is the demand elastic or inelastic at these points? How can this information be useful to management in its pricing and output decisions?;On the basis of your calculations and the information above, what recommendations would you make to Golden Star in terms of price and output levels?;Create your report in a 2- to 3-page Word document.

 

Paper#77260 | Written in 18-Jul-2015

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