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Crane Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida has approached Crane and offered to purchase
Crane Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida has approached Crane and offered to purchase 253000 pounds of dog food for $1.40 per pound. Crane can produce 2026000 pounds of dog food per year, and its results for last year are as follows: Sales (1833000 at $1.65) $3024450 Variable costs 1099800 Contribution margin 1924650 Fixed costs 803000 Operating income $1121650 If Crane accepts the offer, it will only be able to sell 1773000 pounds of dog food at the regular price due to its capacity constraints. What will Crane's total operating income be next year if it accepts the offer? O $1376850 O $1324300 O $1261050 O $2064050
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