A manager of Back Tee 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 $20.00 per dozen. The variable cost to manufacture a dozen golf balls is $17.00 per dozen. The full cost is $23.00 per dozen. Back Tee has a normal selling price of $28.00 per dozen. Back Tee’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?