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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text: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
O $1265300
O $1384100
$3032700
$1329800
O $2073300
1102800
1929900
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?
808000
$1121900
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