advertise drink X as a great fun drink Which product should you compare drink X

# Advertise drink x as a great fun drink which product

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advertise drink “X’ as a “great fun drink”. Which product should you compare drink ‘X” to?A.CokeB.Grape JuiceC.Dr PepperD.Cranberry JuiceE.Pepsi Break Even Analysis Breakeven analysis!Fit DeckShark Tank Season 5 Week 15  Break Even AnalysisRelationships between cost, price, revenue, profitBreak even point = # of units where revenues = cost (or, profits = 0)Key components:Fixed cost (FC)Variable cost (VC)Price (P) Key Formulae - 1[Q * ( P-VC)] – FC[Q * P * (Profit margin)] – FCSet at “0”, solve, and get break-even “Q”Insert values and, for a given “Q”, get value of profit/ loss Key Formulae - 2Profit = [Q * ( P-VC)] – FCIf Profit = 0:BreakevenQ = FC / (P-VC) Solving Exhibit 9.6[Q * P * (Profit margin)] – FC 75000 *1%*12= 900010060%400000Homeowners9000 *100*60%=540,000400000140,000HomeownersSize75000Adoption1%Price100Usage/ year12Margin60%Fixed Costs400000Profit? Breakeven analysis!Fit DeckShark Tank Season 5 Week 15 Fit Deck – Last yearVC = \$2Q = 55,000Q*P = \$640,000P = (640,000/55,000) = \$11.63 (\$14.95??)Profit = \$0Profit = [Q * ( P-VC)] – FC0 = [55000*(11.63 – 2)] – FCFC = [55000*(11.63 – 2)] = \$529,650 Fit Deck – Robert’s mathVC = \$2 ; P = \$14Q*P = \$700,000Q = (700,000/14) = 50,000Cost of goods = Q*VC = 50,000*2 = \$100,000Profit = [Q * ( P-VC)] – FCProfit = Q*P – Q*VC - FC100,000 = 700,000 – 100,000 - FCFC = 700,000 – 100,000 – 100,000 = \$500,000  Profit Potential?  #### You've reached the end of your free preview.

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• Spring '10
• Ashwani
• Marketing
• • • 