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Sunland Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida has approached Sunland and offered to purchase
Sunland Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida has approached Sunland and offered to purchase 259000 pounds of dog food for $1.40 per pound. Sunland can produce 2038000 pounds of dog food per year, and its results for last year are as follows: Sales (1839000 at $1.65) $3034350 Variable costs 1103400 Contribution margin 1930950 Fixed costs 809000 Operating income $1121950 If Sunland accepts the offer, it will only be able to sell 1779000 pounds of dog food at the regular price due to its capacity constraints. What will Sunland's total operating income be next year if it accepts the offer? Select answer from the options below $1330900 $2075150 $1385550 $1266150
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