Hometown Caf sells 30 dozen cupcakes each month. Costs associated with each dozen include $2.05 direct materials,

Hometown Café sells 30 dozen cupcakes each month. Costs associated with each dozen include $2.05 direct materials, $2.75 direct labor, and $1.45 variable overhead. Fixed monthly overhead is $39. Bob's Baking Company has offered to sell the cafe 30 dozen cupcakes a month. If Hometown accepts the offer, its fixed overhead costs would be reduced by 10%.

 What is the highest price Hometown would be willing to pay Bob's Baking Company for a dozen cupcakes?

Answer rating: 100% (QA)

To calculate the highest price that Hometown Caf would be willing to pay Bobs Baking Company for a d... View the full answer