FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Reuben's Deli currently makes rolls for deli sandwiches it
produces. It uses 32,836 rolls annually in the production of
deli sandwiches. The costs to make the rolls are:
Costs
Materials
Labor
Variable overhead
Fixed overhead
Reuben's Deli cost data
Amounts
Increments
$0.3 per roll
0.47 per roll
0.13 per roll
0.38 per roll
A potential supplier has offered to sell Reuben the rolls for
$0.91 each. If the rolls are purchased, 37% of the fixed
overhead could be avoided.
If Reuben accepts the offer, what will the effect on profit be?
Do not round until the final calculation - then round to the
nearest penny, two decimal places. If the effect is negative,
use a dash - not parentheses ().
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Transcribed Image Text:Reuben's Deli currently makes rolls for deli sandwiches it produces. It uses 32,836 rolls annually in the production of deli sandwiches. The costs to make the rolls are: Costs Materials Labor Variable overhead Fixed overhead Reuben's Deli cost data Amounts Increments $0.3 per roll 0.47 per roll 0.13 per roll 0.38 per roll A potential supplier has offered to sell Reuben the rolls for $0.91 each. If the rolls are purchased, 37% of the fixed overhead could be avoided. If Reuben accepts the offer, what will the effect on profit be? Do not round until the final calculation - then round to the nearest penny, two decimal places. If the effect is negative, use a dash - not parentheses ().
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