Solution-What will crane total operating income be next year

What will crane total operating income be next year

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Reference no: EM132952971

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 242000 pounds of dog food for $1.40 per pound.

Crane can produce 2004000 pounds of dog food per year, and its results for last year are as follows:

Sales (1822000 at $1.65) $3006300

Variable costs 1093200

Contribution margin 1913100

Fixed costs 792000

Operating income $1121100

Problem 1: If Crane accepts the offer, it will only be able to sell 1762000 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?

a $1360900
b $1312200
c $1251700
d $2043700

Reference no: EM132952971

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What will crane total operating income be next year

Reference no: EM132952971

Reference no: EM132952971

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