Question

The Hurley Hat Company manufactures baseball hats. Hurley's primary customers are sporting goods stores that supply uniforms to youth baseball teams. Following is Hurley's income statement for 2016. HURLEY HAT COMPANY Income Statement Year Ended December 31, 2016 1.500.000 Sales Revenue Cost of Goods Sold 700.000 Gross Profit 800,000 Selling and Administrative Expenses 500.000 300,000 Operating Income In 2016, Hurley produced and sold 20 baseball hats. Of the Cost of Goods Sold, $150,000 is fixed; 80% of the Selling and Administrative Expenses are fixed. There were no beginning inventories on January 1, 2016. The company is operating at 100.000 hats below full production capacity and is considering increasing advertising to increase sales to the production capaciry level n edicis that an additional 100.000 evni