Burns sporting goods company plant has just enough excess, Accounting Basics

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Burns sporting goods company plant has just enough excess

Problem

A manager of Burns Sporting Goods Company is considering accepting an order from an overseas customer. This customer has requested an order for 200,000 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. Burns Sporting Goods Company plant has just enough excess capacity on the second shift to make the overseas order. Calculate the contribution margin? How does it effect the manager decision?

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Accounting Basics: Burns sporting goods company plant has just enough excess

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