Lark Art Company Sells Unfinished Wooden Decorations at a Price

Essay

Lark Art Company sells unfinished wooden decorations at a price of $15.00.The current profit margin is $5.00 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 $3.00 per unit,additional materials costing an average of $4.00 per unit,and fixed costs would increase by $1,500.If the company estimates that it can sell 600 units for $25.00 per unit each month,should it start taking the orders?