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Dick's Sporting Goods makes customized uniforms. The Great Northwest League has offered to buy 80 basketball jerseys for $16 per jersey. The regular price is $20 per jersey. Dick's purchases the plain jerseys for $12 per jersey, then sews a customized name and number to each jersey at a cost of $3 per jersey. Dick's fixed costs are $7,000 and they have excess capacity available.

If Dick's accepts the special order from The Great Northwest League, its operating profit will

a. Increase by $1,280

b. Increase by $320

c. Increase by $80

d. Decrease by $200

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M946714

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