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Analysis Assignment..edited

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Park University
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Unit 8: Analysis Assignment
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Unit 8: Analysis Assignment
Question one
The BEP (Breakeven Point) formula is as follows: BEP = Fixed costs (FC)/Contribution
per unit (CU) = MSP Variable costs (VC)
An example of this in units would be:
FC: $10,350
VC: $ 9
CU: $15
$10350 / ($15 $9) = 1725 Units
To calculate the BEP in dollars, you would need to multiply the number of units to break even by
the MSP. (Units MSP)
The BEP in terms of dollars would be:
$10350 / ($15- $9) = 1725 Units * $15 = $25,875
Question two.
I have noticed the "skimming price" strategy with electronic brands I shop with. Brands
like Apple will come out with the newest iPhone and charge the maximum price for it.
Customers who are eager to be the first to get their hands on this new iPhone (Usually for social
factors) typically purchase it happily at its peak and premium price. However, when competitors
such as Samsung and LG enter the market with their answer to the new iPhone, prices on the
iPhone start to decline.
To continue the trend of phones, I have seen cell phone providers use the price
penetration strategy. As more and more cell phone service providers enter the market, service

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1 Unit 8: Analysis Assignment Student's Name Institution Course Title Professor's Name Date 2 Unit 8: Analysis Assignment Question one The BEP (Breakeven Point) formula is as follows: BEP = Fixed costs (FC)/Contribution per unit (CU) = MSP – Variable costs (VC) An example of this in units would be: FC: $10,350 VC: $ 9 CU: $15 $10350 / ($15 – $9) = 1725 Units To calculate the BEP in dollars, you would need to multiply the number of units to break even by the MSP. (Units – MSP) The BEP in terms of dollars would be: $10350 / ($15- $9) = 1725 Units * $15 = $25,875 Question two. I have noticed the "skimming price" strategy with electronic brands I shop with. Brands like Apple will come out with the newest iPhone and charge the maximum price for it. Customers who are eager to be the first to get their hands on this new iPhone (Usually for social factors) typically purchase it happily at its peak and premium price. However, when competitors such as Samsung and LG enter the market with their answer to the new iPhone, prices on the iPhone start to decline. To continue the trend of phones, I have seen cell phone providers use the price penetration strategy. As more and more cell phone service providers enter the market, service 3 providers either offer rock bottom priced cell phone service plans or steeply discounted (sometimes free) phones with a contract. These cell phone service providers usually aim to gather as many contracts or customers as they can to take control o ...
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Anonymous
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