Subject: Economics   / Macroeconomics
Question
Golden Star Winery Case
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.
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Let us separate out fixed and variable expenses first.
Fixed Expenses
Fixed Manufacturing expenses   $45,000
Advertising   $10,000
Fixed adminsitrative/selling expenses   $15,000
Total
$70,000
Variable Expenses
Materials   $180,000
Labor   $225,000
Delivery   $30,000
Commissions   $50,000
Travel   $5,000
Total   $490,000
