Profit or loss

Golden Star Winery produces midlevel wines consumed primarily in North America. Given below is the projected income statement for the company for 2011.

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.