Reference no: EM133055331
Questions -
Q1. Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,000 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal:
Costs Amounts
Direct material $13,000
Direct labor 5,000
Manufacturing overhead 7,000
The manufacturing overhead consists of $2,000 of variable costs with the balance being allocated to fixed costs. If Almond Treats buys the cereal, what is the effect on profit?
Q2. Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,000 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal:
Costs Amounts
Direct material $13,000
Direct labor 5,000
Manufacturing overhead 7,000
The manufacturing overhead consists of $2,000 of variable costs with the balance being allocated to fixed costs. Should Almont Treats make or buy the almond cereal? Make it or Buy it?
Q3. Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $20,228 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal:
Costs Amounts
Direct material $14,569
Direct labor 6,131
Manufacturing overhead 7,338
The manufacturing overhead consists of $1,234 of variable costs with the balance being allocated to fixed costs. If Almond Treats buys the cereal, what is the effect on profit?
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