Solution-What will lark total operating income be next year

What will lark total operating income be next year

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Reference no: EM132690641

Lark Company manufactures dog food for distribution in Washington, Oregon, and California. A dog food distributor from Florida has approached Lark and offered to purchase 240,000 pounds of dog food for $1.40per pound.

Lark can produce 2,000,000pounds of dog food per year, and its results for last year are as follows:

Sales (1,820,000 at $1.65) $3,003,000
Variable costs 1,092,000
Contribution margin 1,911,000
Fixed costs 790,000
Operating income $1,121,000

Problem 1: If Lark accepts the offer, it will only be able to sell 1,760,000 pounds of dog food at the regular price due to its capacity constraints. What will Lark's total operating income be next year if it accepts the offer?

Reference no: EM132690641

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What will lark total operating income be next year

Reference no: EM132690641

Reference no: EM132690641

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