Crane Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida has approached Crane and offered to purchase 264000 pounds of dog food for $1.40 per pound. Crane can produce 2048000 pounds of dog food per year, and its results for last year are as follows: Sales (1844000 at $1.65) Variable costs Contribution margin Fixed costs Operating income $3042600 O $1392800 O $1336400 O $2084400 O $1270400 1106400 1936200 814000 $1122200 If Crane accepts the offer, it will only be able to sell 1784000 pounds of dog food at the regular price due to its capacity constraints. What will Crane's total operating income be next year if it accepts the offer?
Crane Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida has approached Crane and offered to purchase 264000 pounds of dog food for $1.40 per pound. Crane can produce 2048000 pounds of dog food per year, and its results for last year are as follows: Sales (1844000 at $1.65) Variable costs Contribution margin Fixed costs Operating income $3042600 O $1392800 O $1336400 O $2084400 O $1270400 1106400 1936200 814000 $1122200 If Crane accepts the offer, it will only be able to sell 1784000 pounds of dog food at the regular price due to its capacity constraints. What will Crane's total operating income be next year if it accepts the offer?
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6EB: Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the...
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![Crane Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida
has approached Crane and offered to purchase 264000 pounds of dog food for $1.40 per pound. Crane can produce 2048000 pounds
of dog food per year, and its results for last year are as follows:
Sales (1844000 at
$1.65)
Variable costs
Contribution margin
Fixed costs
Operating income
$3042600
O $1392800
O $1336400
O $2084400
O $1270400
1106400
1936200
814000
$1122200
If Crane accepts the offer, it will only be able to sell 1784000 pounds of dog food at the regular price due to its capacity constraints.
What will Crane's total operating income be next year if it accepts the offer?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb7d4978a-587f-4fb0-b662-b1647e006431%2Ff6cb0f2e-3fc0-4873-8b66-b33f3cfa99ce%2Fxvfhw55_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Crane Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida
has approached Crane and offered to purchase 264000 pounds of dog food for $1.40 per pound. Crane can produce 2048000 pounds
of dog food per year, and its results for last year are as follows:
Sales (1844000 at
$1.65)
Variable costs
Contribution margin
Fixed costs
Operating income
$3042600
O $1392800
O $1336400
O $2084400
O $1270400
1106400
1936200
814000
$1122200
If Crane accepts the offer, it will only be able to sell 1784000 pounds of dog food at the regular price due to its capacity constraints.
What will Crane's total operating income be next year if it accepts the offer?
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