Question 1 (2 marks) ‘Online Educational Systems’ (Online) has developed a package to deliver integrated curriculum and face to face group learning, for all levels of students around the world, due to the Covid-19 pandemic. Online has asked you to research customer preferences and to recommend a pricing policy. There are limited price differences relating to the timing of classes in the Northern Hemisphere. However, for Southern Hemisphere classes running a class at or below 45 students (normal class size is 50) costs significantly more for Online to run the class. Required (200 words): a. In addition to customer preferences, what information would you like to gather before recommending a pricing policy? Explain why each item you list is relevant. b. Explain why it is important to understand customer preferences before investing in the infrastructure to run the system. c. Is the need to consider customer preferences different for this organisation than for another type of organisation? Why or why not? Question 2 (3 marks) Given you are constrained to your house due to Covid-19 you have decided to try and launch your own small business. Required (200 words): a. Design a small business and document 1 key product. Name your business and product. List a maximum of 10 costs that will be involved in selling your product and explain why they are either a variable or fixed cost. b. Estimate a reasonable selling price per unit for your product and estimate a value for each of the costs you listed in part a. c. Workout your Breakeven point, showing all calculations. d. Assume you require a profit of $25,000, calculate your new breakeven point, showing all calculations. e. Define and calculate the ‘Margin of Safety’, in both units and dollars, assuming you sell 75,000 units. Ensure you include all calculations.
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