Helmer Containers manufactures a variety of boxes used for packaging. Sales of its Model A20 box have increased significantly to a total of 460,000 A20 boxes. Helmer has enough existing production capacity to make all of the boxes it needs. The variable cost of making each A20 box is $0.82.By outsourcing the manufacture of these A20​ boxes, Helmer can reduce its current fixed costs by $115,000. There is no alternative use for the factory space freed up through​ outsourcing, so it will just remain idle.   What is the maximum Helmer will pay per Model A20 box to outsource production of this​ box?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Helmer Containers manufactures a variety of boxes used for packaging. Sales of its Model A20 box have increased significantly to a total of 460,000 A20 boxes. Helmer has enough existing production capacity to make all of the boxes it needs. The variable cost of making each A20 box is $0.82.By outsourcing the manufacture of these A20​ boxes, Helmer can reduce its current fixed costs by $115,000. There is no alternative use for the factory space freed up through​ outsourcing, so it will just remain idle.
 
What is the maximum Helmer will pay per Model A20 box to outsource production of this​ box?
 
 
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