1. If maximizing operating income in the short run were the only goal, the order should a. be accepted. b. not be accepted. 2. One reason to reject the offer is that accepting L. L. Kelly's offer a. may b. will not generate similar (low) offers from other clubs who now willingly pay the $21 normal price. 3. a. Increased b. Lost profits on such business might more than offset the a. gain on sale b. loss on sale from L. L. Kelly. 4. On the other hand, a reason to accept the offer is that this might be a way of gaining L. L. Kelly as a. a regular b. an occasional customer who will then buy other items that generate a. an even greater profit. b. minimal profit. Belltown Athletic Supply (BAS) makes game jerseys for athletic teams. The L. L. Kelly soccer club has offered to buy 120 jerseys for the teams in its league for $16 per jersey. The team price for such jerseys normally is $21, a 75% markup over BAS's purchase price of $12 per jersey. BAS adds a name and number to each jersey at a variable cost of $1 per jersey. The annual fixed cost of equipment used in the printing process is $8,600, and other fixed costs allocated to jerseys are $2,400. BAS makes about 2,200 jerseys per year, so the fixed cost is $5 per jersey. The equipment is used only for printing jerseys and stands idle 75% of the usable time. The manager of BAS turned down the offer, saying, "If we sell at $16 and our cost is $18, we lose money on each jersey we sell. We would like to help your league, but we can't afford to lose money on the sale." Read the requirements