Determining the operating profit of dick sporting goods

Reference no: EM139802

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

Reference no: EM139802

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