AFE_4_FEC Individual Business Report Assessment Brief 2024

Assessment Brief

The firm plans to initially produce a quantity of 32,000 pairs of shoes per month. At the meeting, the firm’s executive team decided to set their initial price based on a 10 percent mark-up over the average total cost. The firm’s Chief Executive Officer (CEO) is concerned that a price set on this basis may not enable the business to compete effectively and maximize profits. She has therefore engaged you as a consultant to advise the firm on the following:

• The initial selling price that would result from using a 10% mark-up over average cost.
• Assuming that all 32,000 pairs are sold, the expected monthly profit that would result from setting this price.
• The breakeven level of output at this price, assuming (initially) that the firm can sell as
  much as it wants at the mark-up price.
• The margin of safety.

Learning Outcomes

The following are the validated learning outcomes for this module. “After successful completion of the module students will be able to:

• Explain how markets and competitors influence business decisions and performance.
• Apply economic ideas, techniques, and theories to understand, analyze, and explain business situations.
• Apply various tools of financial analysis to assess business performance and make judgments about markets.
• Use Excel to create graphs & tables for reporting purposes.”