Balance Shoe Company produces a single product - an athletic shoe pair. The shoe pair sells for $180 and has total variable costs of $80. The shoe pair requires 20 minutes of machine time, Production of shoes is constrained by machine capacity. All of the available machine time of 2,000 hours is being used to meet current demand.
Balance Shoe Company has been approached by PriceCo with a request to supply 2,000 pairs of a new shoe. PriceCo has offered to pay $170 for each new shoe pair. The new shoe pair has an estimated variable cost of $70 and each new shoe pair would require 30 minutes of machine time.
What is the total opportunity cost of accepting the full order from PriceCo?
O $540,000
O $300,000
O $333,333
O $200,000