Potential supplier has offered to sell feast the rolls

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Reference no: EM13776549

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?

Reference no: EM13776549

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