Question
Current sales and production of Carter Sporting Inc. are 10,000 footballs. The footballs are normally sold for $27 each. A foreign customer offers to buy
Current sales and production of Carter Sporting Inc. are 10,000 footballs. The footballs are normally sold for $27 each. A foreign customer offers to buy from Carter 2,000 footballs at $18 each. Pricing policies in the domestic market will not be affected by this order. Carter has enough excess capacity to make the extra 2,000 units. Costs assigned to each unit are as follows:
Unit level costs | $ | 15.50 | |
Product level costs | $ | 3 | |
Facility level costs | $ | 5 | |
Determine the effect on Carter's income if it chooses the better alternative?
Group of answer choices
Accept the order and will be better off by $1,000.
Reject the order and will be better off by $1,000.
Reject the order and will be better off by $6,000.
Accept the order and will be better off by $5,000.
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