Phoenix Corporation Makes and Sells the "Desert Icon", a Wall

question 120

Essay

Phoenix Corporation makes and sells the "Desert Icon", a wall hanging depicting a magical cactus plant. The Desert Icons are sold at specialty shops for $50 each. The capacity of the plant is 15,000 Icons. Costs to manufacture and sell each wall hanging are as follows:
Phoenix Corporation has been approached by a Oklahoma company about purchasing 2,500 Desert Icons. The company is currently making and selling 15,000 per year. The Oklahoma company wants to attach its own state label, which increases costs by $.50 each. No selling expenses would be incurred on this order. The corporation believes that it must make an additional $1 on each Desert Icon to accept this offer.

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Definitions:

Sale Of Merchandise

This refers to the income generated from selling products that a business typically offers to its customers.

Initial Investment

Initial Investment is the amount of money used to start a business venture, purchase an asset, or invest in a financial instrument at its inception.

Assets

Resources owned by a business with future economic value that can be measured and expressed in dollars.

Equities

Financial securities representing ownership interest in a company, typically in the form of shares of stock.