Tina Turner Burger Co. (TTBC) is currently making all of its burger patties in-house by hand...

 

Transcribed Image Text:

Tina Turner Burger Co. (TTBC) is currently making all of its burger patties in-house by hand using premium ingredients. It makes and sells 41,400 patties per year. The patty is used in most of the menu items at TTBC. The breakdown of the cost per patty is shown below. Direct Materials $1.60 Direct Labour $2.20 Variable Costs $1.00 Fixed Costs $0.60 Unit Cost $5.40 The fixed cost (at $0.60/unit) would still remain with the company even if TTBC stops manufacturing the patty. An outside supplier has offered to sell a similar patty to TTBC for $5.40. The mixer currently used to mix the patty ingredients could be used for other recipes. Do not enter dollar signs or commas in the input boxes. Use the negative sign for a negative change in operating income. a) Should TTBC make or buy the patty? Cost to Make: $ Cost to Buy: $ Therefore TTBC should: # b) What is the maximum price TTBC should be willing to pay an outside supplier for the party? Maximum Price: $ G similar patty to TTBC for $5.40. The mixer currently used to mix the patty ingredients could be used for other recipes. Do not enter dollar signs or commas in the input boxes. Use the negative sign for a negative change in operating income. a) Should TTBC make or buy the patty? Cost to Make: $ Cost to Buy: $ Therefore TTBC should: b) What is the maximum price TTBC should be willing to pay an outside supplier for the patty? Maximum Price: $ c) If TTBC buys the patty for $5.40 instead of making it, by how much will income from operations increase or decrease? Change in operating income: $ Check Tina Turner Burger Co. (TTBC) is currently making all of its burger patties in-house by hand using premium ingredients. It makes and sells 41,400 patties per year. The patty is used in most of the menu items at TTBC. The breakdown of the cost per patty is shown below. Direct Materials $1.60 Direct Labour $2.20 Variable Costs $1.00 Fixed Costs $0.60 Unit Cost $5.40 The fixed cost (at $0.60/unit) would still remain with the company even if TTBC stops manufacturing the patty. An outside supplier has offered to sell a similar patty to TTBC for $5.40. The mixer currently used to mix the patty ingredients could be used for other recipes. Do not enter dollar signs or commas in the input boxes. Use the negative sign for a negative change in operating income. a) Should TTBC make or buy the patty? Cost to Make: $ Cost to Buy: $ Therefore TTBC should: # b) What is the maximum price TTBC should be willing to pay an outside supplier for the party? Maximum Price: $ G similar patty to TTBC for $5.40. The mixer currently used to mix the patty ingredients could be used for other recipes. Do not enter dollar signs or commas in the input boxes. Use the negative sign for a negative change in operating income. a) Should TTBC make or buy the patty? Cost to Make: $ Cost to Buy: $ Therefore TTBC should: b) What is the maximum price TTBC should be willing to pay an outside supplier for the patty? Maximum Price: $ c) If TTBC buys the patty for $5.40 instead of making it, by how much will income from operations increase or decrease? Change in operating income: $ Check