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Essay

Classic Pen

Essay specific features

 

Issue:

Miscellaneous

 

Written by:

Theodore M

 

Date added:

October 25, 2010

 

Level:

 

Grade:

A

 

No of pages / words:

1 / 279

 

Was viewed:

9837 times

 

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Essay content:

However, producing the new colors has caused many time consuming changeovers, increasing production costs and decreasing the Profit Margin. Comprehensive Return on Sales has fallen from 22% to 13.5% (See Exhibit 1). Blue and black pens are still generating a 21.6% and 22.6% return, while red and purple pens are operating at a loss, reducing both Net Income and Return on Sales...
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Classic Pen Company could easily restore its Profit Margin to 22% if it stopped making red and purple pens. Currently, red and purple pens are causing Classic Pen Company to lose money. If the company wants to continue to produce red and purple pens, it should increase the selling price of these colors, so the Return on Sales is equal to, if not greater than, that of the blue and black pens...
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