Revenue Cost and Concept

The idea of this paper is to talk about suggestion for Clear Hear with the purpose of increasing revenue, reach model production levels and decide how fixed and variable costs can be used to capitalize on profit, and cost reduction techniques. Clear Hear is a maker of cell phones and at present have a decision to make on the subject of which type of cell phone to produce either the Alpha or the Beta model. The company has acquire an offer to generate 100,000 cell phones at a price of 15.00 each, with a release date of 90 days, by which will captivate the company’s values and computation. Should Clear Hear take this deal?
Clear Hear needs to be practical with what the company can and cannot produce while staying optimistic, determined and practical. If the company takes Big Box’s offer of 1.5MM dollars for 100,000 units, then they need to manufacture that amount within the 90 day delivery date. Currently this company only has two production lines; one is utilized for the company’s Beta model and the other for its Alpha model. The Alpha model is the most inexpensive one to produce, at a current price of $20 from their Beta model that is $30. Equally these models presently cost a great deal more to produce then what the offer stands for. In order to boost the company’s revenue, the company should increase production of a capacity 70,000 units to 100,000. How can this be done? Clearly the company can change the second line that is used to produce their Beta model to also produce more of their least expensive Alpha model units. In this way the company has the ability and area to produce the amount that is needed for the offer. (UOP, 2009)
The fixed cost to construct the Alpha model is nine dollars per unit. This cost cannot be distorted or adjusted because fixed costs are linked with the very existence of a firm’s plant and consequently must be paid even if its output is zero. Some fixed costs may consist of rental payments, interest and depreciation on equipment,...