Feast corporation currently makes the rolls that it uses


Feast Corporation currently makes the rolls that it uses for its sandwiches, It uses 50,000 rolls annually. The costs to make the rolls are given below:

Material= 0.04 per roll

Labor = 0.03 per roll

Variable overhead = 0.02 per roll

Fixed overhead = 0.07 per roll

 

A potential supplier has offered to sell Feast the rolls for 0.11 each. If the rolls are purchased, 20% of the fixed overheads could be avoided. If Feast accepts the offer it will be?

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Financial Accounting: Feast corporation currently makes the rolls that it uses
Reference No:- TGS01050510

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