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. Given the information, should the order be accepted or rejected? What other considerations should be discussed in the decision? Be sure to provide explanation for your answer
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. Given the information, should the order be accepted or rejected? What other considerations should be discussed in the decision? Be sure to provide explanation for your answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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. Given the information, should the order be accepted or rejected? What other considerations should be discussed in the decision? Be sure to provide explanation for your answer
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