Question
Sams Enterprises manufactures hockey sticks. The company's capacity is 5,500 sticks per month; however, it currently sells only 3,100 sticks per month. Big City Sports
Sams Enterprises manufactures hockey sticks. The company's capacity is 5,500 sticks per month; however, it currently sells only 3,100 sticks per month. Big City Sports has offered to buy 600 hockey sticks for $50 each from Sams. Normally, the company sells its sticks for $65. Sams accounting records report the cost of each stick to be $40, including fixed costs of $20 each.
Required:
If Sams were to accept Big City's offer, what would be the impact on Sams income?
I need a step by step pocess for this. I'm still confused as to how to solve these.
Thanks.
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