Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the...
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Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the production of the boxed lunches. The costs to make the cookies are: Materials Labor Variable overhead Fixed overhead $0.30 per cookie 0.30 per cookie 0.20 per cookie 0.10 per cookie A potential supplier has offered to sell Country Diner the cookies for $0.85 each. If the cookies are purchased, 10% of the fixed overhead could be avoided. If Jason accepts the offer, what will the effect on profit be? Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the production of the boxed lunches. The costs to make the cookies are: Materials Labor Variable overhead Fixed overhead $0.30 per cookie 0.30 per cookie 0.20 per cookie 0.10 per cookie A potential supplier has offered to sell Country Diner the cookies for $0.85 each. If the cookies are purchased, 10% of the fixed overhead could be avoided. If Jason accepts the offer, what will the effect on profit be?
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First lets calculate the current cost of producing 40000 cookies Materials cost 030 x 40000 12000 La... View the full answer
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