A manager of Burns Sporting Goods Company is considering accepting an order from an overseas customer. This customer has requested an order for 200,000 dozen golf balls at a price of $22 per dozen. The variable cost to manufacture a dozen golf balls is $18 per dozen. The full cost is $25 per dozen. Burns Sporting Goods Company plant has just enough excess capacity on the second shift to make the overseas order. Discuss the considerations in accepting or rejecting the order.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 4TIF: Decision on accepting additional business A manager of Varden Sporting Goods Company is considering...
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A manager of Burns Sporting Goods Company is considering accepting an order from an overseas customer. This customer has requested an order for 200,000 dozen golf balls at a price of $22 per dozen. The variable cost to manufacture a dozen golf balls is $18 per dozen. The full cost is $25 per dozen. Burns Sporting Goods Company plant has just enough excess capacity on the second shift to make the overseas order. Discuss the considerations in accepting or rejecting the order.

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