A manager of Varden Sporting Goods Company is considering accepting an order from an overseas customer. This customer has requested an order for 20,000 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. Varden has a normal selling price of $ 35 per dozen. Varden’s plant has just enough excess capacity on the second shift to make the overseas order. What are some considerations in accepting or rejecting this order?
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