Blossom Industries manufactures a component used by car manufacturers. Blossom can produce 1046000 components per...
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Blossom Industries manufactures a component used by car manufacturers. Blossom can produce 1046000 components per year. A foreign car manufacturer has approached Blossom with an offer to purchase 143000 components at price of $6 per unit. Blossom's results for last year are as follows: Sales (923000 at $8) $7384000 Variable costs 2769000 Contribution margin 4615000 Fixed costs 2373000 Operating income $2242000 it Blossom accepts the offer, it will only be able to sell 903000 units at the regular price due to its capacity constraints. What will Blossom's total operating income be next year if it accepts the offer? $2857000 $2940000 $4944000 $2571000
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