Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond...

Transcribed Image Text:

Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,000 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material Direct labor Manufacturing overhead Total The manufacturing overhead consists of $2,000 of variable costs with the balance being allocated to fixed costs. Should Almond Treats make or buy the almond cereal? NOTE Enter amounts rounded to the nearest whole dollar. Total relevant costs Cost to buy $13,000 5,000 7,000 $25,000 Recommendation Effect of buying rather than making $ S $ + in profit Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,000 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material Direct labor Manufacturing overhead Total The manufacturing overhead consists of $2,000 of variable costs with the balance being allocated to fixed costs. Should Almond Treats make or buy the almond cereal? NOTE Enter amounts rounded to the nearest whole dollar. Total relevant costs Cost to buy $13,000 5,000 7,000 $25,000 Recommendation Effect of buying rather than making $ S $ + in profit

Answer rating: 100% (QA)

Direct material Direct ... View the full answer