Question: Our town School District is considering outsourcing their lunch program. The following costs relate to preparing 4,000 meals each month: Food cost - 4500 Cafeteria

Our town School District is considering outsourcing their lunch program. The following costs relate to preparing 4,000 meals each month:

Food cost - 4500

Cafeteria worker's wages - 7500

Variable overhead - 2000

Allocated fixed overhead - 6000

Total - 20,000

A food service provider has offered to provide ready - to - eat meals at a Cost of $ 2.75. if OURTOWN'S accepts the offer , they can eliminate one of their 3 workers

What would be the financial impact on the school district if they accept the provider's offer?

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