Sheridan Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida has approached Sheridan and offered to purchase 258000 pounds of dog food for $1.40 per pound. Sheridan can produce 2036000 pounds of dog food per year, and its results for last year are as follows: Sales (1838000 at $1.65) Variable costs Contribution margin Fixed costs Operating income $3032700 O $1265300 O $1384100 $1329800 O $2073300 1102800 1929900 808000 $1121900 If Sheridan accepts the offer, it will only be able to sell 1778000 pounds of dog food at the regular price due to its capacity constraints. What will Sheridan's total operating income be next year if it accepts the offer?

Sheridan Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida has approached Sheridan and offered to purchase 258000 pounds of dog food for $1.40 per pound. Sheridan can produce 2036000 pounds of dog food per year, and its results for last year are as follows: Sales (1838000 at $1.65) Variable costs Contribution margin Fixed costs Operating income $3032700 O $1265300 O $1384100 $1329800 O $2073300 1102800 1929900 808000 $1121900 If Sheridan accepts the offer, it will only be able to sell 1778000 pounds of dog food at the regular price due to its capacity constraints. What will Sheridan's total operating income be next year if it accepts the offer?

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 2CMA

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