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Should sports gear company accept the proposal

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Problem 1: Special Order Decision: Operating with Idle Capacity.Sports Gear Company currently produces 20,000 jerseys a year for its regular customers and charges $12 per jersey. Sports Gear Company has capacity to produce an additional 10,000 jerseys if sales grow in the future. Variable costs total $8 per jersey and annual fixed costs total $30,000. Castro City recently approached the company and proposed a one-time purchase of 6,000 jerseys for $10 each. Should Sports Gear Company accept the proposal?

Reference no: EM132750484

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