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ABC Company packages and distributes animal feed. The following are information for the animal feed: $ Material cost Estimated sales Capacity Fixed overhead 9.60 3,600
ABC Company packages and distributes animal feed. The following are information for the animal feed: $ Material cost Estimated sales Capacity Fixed overhead 9.60 3,600 6,000 12,000 per tone tones tones $ The Company has received an offer from a foreign firm and sales to this foreign firm would not affect domestic sales. However, the Company will incur additional fixed overhead cost of: $ 2,400 $ Foreign firm offer Foreign firm order 13.20 1,200 per tone tones Compute the change in operating income if ABC Company decides to accept the offer
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