$9$:$11$

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Module $7$ Homework.xlsx

P$8-1$

P$9-1$

Problem $$-1$ Determining the Profit$-$Maximizing Prict

Spencer Electronics has jast developed a low$-$end electronic calendar that it plans to sell via a cable chanel marketing program. A fee is charged by the cable company for selling the item, for which the program will sell the calendar over six $10-$minute segments in September. The company plans to wait for all orders to coene in$,$ then it will produce exactly the number of units ordered. Production time will be less than theree weeks. Spencer has provided the following cost information:

$\backslash$table$[[$Fee charged by cable coempany for selling items,,$205,$of revenue,$],[$Fixed costs per prodaction run,,$160,000,,],[$Variable production costs per unit,,,$28,],[$Stuipping cost per calendar to customers,,,$5,],[,,,,]]$

Marsha Andersen, a product manager at Spencer, is charged with recommending a price for the ittm. Based on her xperience with similar items, focus group responses, and survey information, she has estimated the number of units that can be sold at various prices:

$\backslash$table$[[,,$Price,Quantity,,,,,$],[,,585,15,000,,,,,],[,,575,20,000,,,,,],[,,565,30,000,,,,,],[,,555,45,000,,,,,],[,,545,65,000,,,,,],[,,,,,,,,],[$Required$],[$a$.$ Calculate expected profit for each price.,,,,,,$],[,,,,,,,,],[$Quantity$,$Price,Variable Cost,CM$/$Unit$,$Total CM$,$Fixed Cests,Profit,,$],[15,000,585,550,535,$$$525,000,$$$160,000,$$$365,000,,($Con$],[20,000,75,,,,$$$160,000,,,],[30,000,65,,,,$$$160,000,,,],[45,000,55,,,,$$$160,000,,,],[65,000,45,,,,$$$160,000,,,],[,,,,,,,,],[$b$.$ Which price maximizes company profit?,,,,,,$]]$