Augustine Containers manufactures a variety of boxes used for packaging. Sales of its Model A30 box have

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Augustine Containers manufactures a variety of boxes used for packaging. Sales of its Model A30 box have increased significantly to a total of 360,000 A30 boxes. Augustine has enough existing production capacity to make all of the boxes it needs. The variable cost of making each A30 box is $0.80. By outsourcing the manufacture of these A30 boxes, Augustine can reduce its current fixed costs by $54,000. There is no alternative use for the factory space freed up through outsourcing, so it will just remain idle. What is the maximum Augustine will pay per Model A30 box to outsource production of this box?
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Managerial Accounting

ISBN: 978-0132890540

3rd edition

Authors: Karen W. Braun, Wendy M. Tietz

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