Question
Bridgewater Company sells unfinished wooden decorations at a price of $30.00. The current profit margin is $10.00 per decoration. The company is considering taking individual
Bridgewater Company sells unfinished wooden decorations at a price of $30.00. The current profit margin is $10.00 per decoration. The company is considering taking individual orders and customizing them for customers. To finish the decoration, the company would have to pay additional labor of $6.00 per unit, additional materials costing an average of $8.00 per unit, and fixed costs would increase by $3,000. If the company estimates that it can sell 1200 units for $50.00 per unit each month,
sell or process further?
Determine if the company should start taking the orders? Show the work.
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