A manager of Varden Sporting Goods Company is considering accepting an order from an overseas...
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A manager of Varden Sporting Goods Company is considering accepting an order from an overseas customer. This customer has requested an order for 20,000 dozen golf balls at a price of $22 per dozen. The variable cost to manufacture a dozen golf balls is $18 per dozen. The full cost is $25 per dozen. Varden has a normal selling price of $35 per dozen. Vardens plant has just enough excess capacity on the second shift to make the overseas order.
What are some considerations in accepting or rejecting this order? Please expand on your answer.
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