Clear Hear Revenue, Cost Concepts, and Market Structure Proposal

Essay by iggymac2007University, Master'sA, July 2010

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Clear Hear Revenue, Cost Concepts, and Market Structure Proposal

University of Phoenix


Clear Hear Revenue, Cost Concepts, and Market Structure Proposal

Clear Hear, a manufacturer of cell phones, is always looking to increase its revenue, maximize its production operation while adhering to its corporate core values which are to keep its employees working, provide customers with products on-time, reliability that meets or exceed expectations, and treat business partners the same as Clear Hear wants to be treated. This paper presents an opportunity for Clear Hear to increase its revenue but not without challenges to its sales margins and production operations due to the introduction a new unit selling price. The paper continues with providing the process used to make recommendation including supportive economic concepts and assumptions made.

Opportunities and Challenges

Clear Hear has the opportunity to secure a 100,000 piece order of a product similar to its Alpha model.

Currently, Clear Hear manufactures two different cell phones; Alpha model and Beta model. Clear Hear's business development specialist, Kendra Sherman, has locked in an order from a major chain store, Big Box, which is running a telephone service provider promotion. Big Box is not willing to pay more than $15 per unit; currently Clear Hear selling price for its Alpha model is $20 which yields a 15% margin. Clear Hear selling price of its Beta model is $30 which yields a 27% margin as per the chart 1 (Clear Hear Scenario, n.d.).

Clear Hear

Phone Model



Price per unit



Total Cost



Variable cost per unit



Fixed overhead






Sales margin



(chart 1)

Another stipulation is that Clear Hear has 90 days to produce the Big Box order but...