Baldwin Athletic Supply (BAS) makes game jerseys for athletic teams. The K. J. Kennedy soccer club has offered to buy 150 jerseys for the teams in its league for $17 per jersey. The team price for such jerseys normally is $21, a 75% markup over BAS's purchase price of $12 per jersey. BAS adds a name and number to each jersey at a variable cost of $1 per jersey. The annual fixed cost of equipment used in the printing process is $8,400, and other fixed costs allocated to jerseys are $2, 100. BAS makes about 2, 100 jerseys per year, so the fixed cost is $5 per jersey. The equipment is used only for printing jerseys and stands idle 75% of the usable time.

The manager of BAS turned down the offer, saying, "If we sell at $17 and our cost is $18, we lose money on each jersey we sell. We would like to help your league, but we can't afford to lose money

on the sale "

Read the requirements

Requirement 1. Compute the amount by which the operating income of BAS would change if it accepted K. J. Kennedy's offer by using the contribution-margin approach. (For amounts with a SO balance, make sure to enter "O" in the appropriate cell.)

Requirements

1.	Compute the amount by which the operating income of BAS would change if it accepted K. J. Kennedy's offer.
2.	Suppose you were the manager of BAS. Would you accept the offer? In addition to considering the quantitative impact computed in requirement 1, list two qualitative considerations that would influence your decision-one qualitative factor supporting acceptance of the offer and one supporting rejection.

Requirement 1. Compute the amount by which the operating income of BAS would change if it accepted

K. J. Kennedy's

offer by using the contribution-margin approach. (For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.)

		Effect of
		Special Order
Units
Sales
Less variable costs:
	Purchase cost
	Variable printing cost
	Total variable costs
Contribution margin
Total fixed costs
Operating income